Submitted To-

Mr. Md. Mehedi Shahnewaz

Course: PRINCIPLES OF MARKETING
Department of Business Administration



Submitted By-
Sumaia Akter
ID: 113BBA0032
Batch: 24
th

Program- BBA




The Millennium University



Assignment
on
SOCIAL BUSINESS
Social Business:
The term social business is often confused with social enterprise. Both are similar in many ways, yet
distinct in others. In fact social business may be called as a component of social enterprise or one of the
ways by which a social enterprise expresses itself.
Although social business may be carried out in any area but sectors like healthcare, housing, nutrition,
education, financial services to the poor and the down trodden remain the priority. Unlike profit making
organizations, success in the field of social business is governed by the amount of impact it is able to
create or the positive change it has been able to bring in the existing scheme of things.
Social Business deals with business exceptions rather than rules, requiring flexible answers to complex
questions in dynamic environments. As such, it isnt about giving predefined answers to predictable
questions; it is about giving unpredictable answers to undefined questions.
Social Business serves best where an increased distance between people on all sides is negatively
affecting business as a whole. Social Business is best for establishing ties between unknown people.
As such, it will gradually replace distance by proximity, thus swapping anonymity for intimacy.
In Bangladesh Social business, as the term had once been commonly used, was first defined by Nobel
Peace Prize laureate Prof. Muhammad Yunus and is described in his books Creating a world without
povertySocial Business and the future of capitalism and Building Social BusinessThe new kind of
capitalism that serves humanity's most pressing needs.
In these books, Yunus defined a Social Business a business:
Created and designed to address a social problem
A non-loss, non-dividend company, i.e.
1. It is financially self-sustainable and
2. Profits realized by the business are reinvested in the business itself (or used to start other social
businesses), with the aim of increasing social impact, for example expanding the companys
reach, improving the products or services or in other ways subsidizing the social mission.
Unlike a profit-maximizing business, the prime aim of a Social Business is not to maximize profits
(although generating profits is desired). Furthermore, business owners are not receiving any dividend
out of the business profits, if any.
On the other hand, unlike a non-profit, a Social Business is not dependent on donations or on private or
public grants to survive and to operate, because, as any other business, it is self-sustainable.
Furthermore, unlike a non-profit, where funds are spent only once on the field, funds in a Social
Business are invested to increase and improve the business' operations on the field on an indefinite
basis. Per Yunus' quote: "A charity dollar has only one life; a Social Business dollar can be invested over
and over again."

SEVEN PRINCIPLES OF SOCIAL BUSINESS:
These were developed by Prof. Muhammad Yunus and Hans Reitz, the co-founder of Grameen Creative
Lab:
1. Business objective will be to overcome poverty, or one or more problems (such as education,
health, technology access, and environment) which threaten people and society; not profit
maximization
2. Financial and economic sustainability
3. Investors get back their investment amount only. No dividend is given beyond investment
money
4. When investment amount is paid back, company profit stays with the company for expansion
and improvement
5. Environmentally conscious
6. Workforce gets market wage with better working conditions
7. ...do it with joy
SOCIAL BUSINESS BENEFITS:
Consider these strategies to explain social tools to people without drowning them in social speak or
meaningless jargon.
Simon Sinek's TED talk on leadership made the point that the part of our brain that controls language is
not the same part of our brain that controls decision-making and emotion. This is where social business
initiatives often fall down. We start throwing language at people--words like blogs, wikis, microblogging,
even the term social business itself. None of those things really matter. They're tools and methods that
enable us to do things that matter.
What are the things that do matter?
Making sure we get the most out of the resources we invest in by making them visible and
available to all the people in our ecosystem that value them.
Making customers feel that they're valued by giving them experiences--with our products,
services, support, and billing--that are seamless and easy to use.
Making employees feel like their contributions matter by caring enough to promote their ideas
and connect them to resources.
Building up the comfort level and knowledge of new connections so that they proactively want
to get involved with our companies.
Creating strong relationships by having ambassadors in more places than any one person could
ever be.
Ultimately, what matters most is ensuring that everyone in our ecosystem feels valued and recognized
in proportion to their contributions because that drives revenue, profitability, and happiness. A business
model that promotes happiness and personal satisfaction will always win out over one that doesn't.
People unfamiliar with the tools of this new social business space almost always react poorly to initial
messages that focus on the tools and how they will "revolutionize" business. They freeze in their tracks,
because they don't understand the language and the technology. Often they're people with years of
expertise, who are knowledgeable about their work and aren't accustomed to feeling uninformed.
It's like asking someone who has never sailed to put in the battens and hoist. They don't understand the
terms and don't have the motivation to learn them because they've never sailed. Instead, it's better to
ask them if they'd like to cool off, relax, and enjoy the beautiful view from the harbor.
You must motivate people in language that they understand before introducing new ways of doing
business. Here are some approaches you can take to help people who are new to social tools
understand them:
Social technologies and processes for internal use:
Social Tool Use Case Translation Value
Blog for executives and subject
matter experts
Be more productive, interact
with a lot more people, and
repeat yourself less.
Cuts duplicate effort, improves
personal relationships, and
provides faster action and
reaction times.
Discussion board for project
status updates
Reduce email clutter and time
lost managing it; centralize
information so it's easy to find
even after employees leave.
Saves up to 2 hours per day per
person not having to manage
project-related email, and
increases knowledge capture
and visibility.
Wiki for review cycles Cut down on time wasted
finding the current version of
documents and editing the
wrong versions.
Provides faster feedback and
ensures you're always
contributing to the most
current information. Cuts
wasted effort.
Microblog for work updates
among teams
Reduce or eliminate project
status meetings while staying
more aware of project status.
Saves up to four hours per
person per week in time
previously spent in meetings.
Internal social network that
centralizes employee profiles
and includes tags and expertise
fields.
More easily find subject experts
in your organization.
Reduces duplicate work,
increases innovation, and cuts
time spent looking for
information.
Online chat tool that lets
employees ask HR questions
Lets you easily locate policies,
documents, and other HR info
Centralizes more of the HR
team and reduces time spent
looking for HR information.


Social technologies and processes for external use:
Social Tool Use Case Translation Value
Customer support forums Give customers a place where
they can connect, create niche
support documentation, and
help each other
Decreases time to answers to
questions, cuts number of
support queries, and
encourages innovative uses of
products and services.
Drive word of mouth by sharing
blogs, videos, podcasts, and
other content on social
networks
Educate the market about your
product by encouraging people
to share content with their
connections.
Reduces cost of sales and
customer churn because
customer is educated before
sale.
Engage influencers Provide those most likely to
drive positive results for your
company with access and value.
Provides market credibility,
positive market impression, and
sales.
Co-innovate and crowdsource
ideas
Solicit and vet ideas from and
assess risks with a broader
audience then you could in
person.
Increases the percentage of
successful new products and
features, and reduces risks.
Use a community to extend the
value of an event
Reach 10 times the number of
attendees by enabling
participants to share and
discuss event content before
and after.
Increases the relevance and
audience for your event
investment.

There are hundreds of small-use cases that could benefit from using networked communications
environments. Start looking for ones that either result in a lot of lost productivity (overloaded email in-
boxes, meetings, travel) or where the company spends a lot of money (support, marketing content,
events, advertising, healthcare benefits, training).
You can treat social business initiatives like landscaping and use them to redesign your communications
ecosystem. Or you can view them as weeding exercise and change one communications habit at a time.
Which you choose will depend on how much executive support you have, how culturally ready your
company is, and how much budget is available. There are benefits and risks to both, but regardless of
your approach, the more specific you are about how these tools and processes will help people do their
work, the more successful you'll be.
Social Business Models: Lessons from the Grameen Experience
Muhammad Yunus, Bertrand Moingeon and Laurence Lehmann-Ortega
Grameen bank, founded in 1976, has both pioneered the development of micro-finance, and created
nearly 30 businesses designed to alleviate poverty. The article traces the gradual development of
Grameens expertise in formulating social business models, which require new value propositions, value
constellations and profit equations, and as such, resembles business model innovation. The article
presents five lessons learned from this experience: three are similar to those of conventional business
model innovation - challenging conventional thinking, finding complementary partners and undertaking
continuous experimentation; two are specific to social business models: recruiting social-profit-oriented
shareholders, and specifying social profit objectives clearly and early. We suggest these new business
models e where stakeholders replace shareholders as the focus of value maximization e could empower
capitalism to address overwhelming global concerns.
Introduction
The Grameen Group is a network of nearly 30 sister organizations linked to the Bangladeshi Grameen
Bank, the microcredit pioneer and (together with its founder, Muhammad Yunus, one of this articles co-
authors) 2006 Nobel Peace Prize winner. This group was established in 1983 with the creation of the
Grameen Bank (Grameen means village), within the framework of a new law drafted specifically for the
purpose. Yunus, then a professor in economics, had already started to lend money to people trapped
into poverty by greedy moneylenders. He had discovered that entrepreneurship was by no means a rare
quality among poor people e but that traditional banks refused to grant loans without collateral.
Grameen Bank now gives loans to over 7.5 million poor people-97 percent of whom are women e which
help the poor lift themselves out of poverty:
68 percent of the families of Grameen Bank borrowers have crossed the poverty line. Motivation
towards repayment is high, with rates currently running at 98.4 percent, and the bank has been
profitable in every year of its existence except 1983, 1991 and 1992. The socially-oriented organizations
in the Grameen Group now range from the countrys largest phone company to one supplying
affordable healthcare. The Groups on-going experience (over almost 30 years) of building firms whose
purpose is to alleviate poverty has led to the emergence of the concept of social business, which can be
viewed as still being under construction. Established multinational companies (MNC) have recently
shown some interest in the Grameen experience and in its fight against poverty as part of a more
general emphasis on corporate social responsibility (CSR). However shareholder value maximization
remains the rule in the capitalist system, and e clearly e the reconciliation of this with social objectives is
often problematic. Thus, although advocates of CSR like to propose that companies should be measured
by a triple bottom line of financial, social and environmental benefits, ultimately only one bottom line
usually matters: financial profit.
However, research has shown that, if managed strategically, CSR projects can indeed pay off, both
socially and financially.1 In the midst of the current financial and economic crisis, some companies have
begun to question their role more fundamentally and seem to be awakening to social change issues.
Some pioneering established companies have sought to implement more pro-active CSR policies that
anticipate social trends and go beyond the minimum required,2 and this impetus has led to the rise of
the number of social businesses. Many of these have turned to Grameen to benefit from its experience
to help them achieve these goals, and partnered with it in a range of social business ventures. We report
on three of these as our case studies:
- Grameen Phone, a partnership with Telenor (the Norwegian telecommunications company), has
become one of the largest tax payers in Bangladesh. The success is based on the Grameen telephone
ladies, who provide a phone service in their villages by lending users a phone for just a couple of
minutes e avoiding them having to make costly handset purchases;
- Grameen Veolia is a co-creation with Veolia Water (one of the worlds leading water service providers)
designed to use simplified surface-water treatment systems to provide rural populations with affordable
access to drinking water, distributed at village drinking fountains or via cans, using prepaid card systems;
- Grameen Danone is collaboration with Danone (one of the worlds leading healthy food companies)
that offers an affordable and easily available dairy product developed to fulfill the nutritional needs of
Bangladeshi children. The yoghurt is produced locally and distributed door-to-door by Grameen ladies.
In the capitalist system, two extreme types of corporate bodies can be distinguished. On the one hand,
companies can be seen as profit-maximizing businesses, whose purpose is to create shareholder value.
On the other, non-profit organizations exist to fulfill social objectives. Figure 1 shows how a social
business borrows from both these entities: it has to cover its full costs from its operations, and its
owners are entitled to recover their invested money, but it is more causethan profit-driven. Its position
in the lower right quadrant shows that it has both the potential to act as a change agent for the world,
and sufficient business-like characteristics to ensure it survives to do so.
In organizational structure, this new form of business is basically the same as profit-maximizing
businesses: it is not a charity, but a business in every sense. The managerial mindset must be the same
as in a business: when you are running a social business, you think and work differently than if you were
running a charity, even though your objective is different from a profit-maximizing company. At the
same time as trying to achieve their social objective, social businesses need to recover their full costs so
they can be self-sustainable. Their owners never intend to make profits for themselves (there are no
dividends), but they are entitled to get their money back if they wish. Rather than being passed on to
investors, surpluses generated by the social business are reinvested.
In the business, and thus, ultimately, passed on to the target group of beneficiaries in such forms as
lower prices, better service or greater accessibility. Thus, a social business is designed and operated just
like a regular business enterprise, with products, services, customers, markets, expenses and revenues.
It is a no-loss, no-dividend, self-sustaining company that sells goods or services and repays investments
to its owners, but whose primary purpose is to serve society and improve the lot of the poor. Here it
differs from NGOs, most of which are not designed to recover their total costs from their operations,
and are therefore obliged to devote part of their time and energy to raising money. As it seeks self-
sustainability, a social business only relies on its investors at the beginning of a development project.
This is close to the concept of social entrepreneurship, defined by Mair and Marti as a process
involving the innovative use and combination of resources to pursue opportunities to catalyze social
change and/or address social needs. Social businesses can be seen as a subset of social
entrepreneurship, which includes both profit and not-for-profit initiatives, and which can be
distinguished from conventional entrepreneurship through the relative priority given to social wealth
creation vs. economic wealth creation. In business entrepreneurship, social wealth is a by-product of the
economic value created. All those who design and run social businesses are social entrepreneurs - but
not all social entrepreneurs are engaged in social businesses (some models, for instance, still include
conventional dividend payments to profit oriented shareholders). Hence, a social business is a new form
of business that can be located somewhere between a profit-maximizing and a non-profit organization.
But why might investors put money into such a business? The many billions of dollars that people
around the world donated to charitable causes every year demonstrate that people want to give money
in a way that benefits other human beings. However, as noted above, investing in a social business is
different from philanthropy in several ways e the social business is self-sustaining and investors get their
money back: people who donate to charity do not. The investor also remains the owner of the company
and can thus decide its future course of action, so that e as well as a chance to provide money e the
social business offers businesspeople an exciting opportunity to leverage their own business skills and
creativity to solve social problems.
Social business as business model innovation
The business model concept is currently attracting much attention from researchers, and seems useful
in offering guidance as how to create social businesses. However, despite ever-growing literature on the
business model concept, there is no consensus as to its definition. An in-depth analysis of business
model components in academic literature shows that, among the plethora of definitions, three elements
are usually distinguished: the product/service proposed to customers, the way the company is organized
so as to deliver this product and service to its customers, and the revenue model. Some authors,
however, focus on just some of these components: Chesbrough and Rosembloom, for example, focus on
the revenue model, whereas Zott and Amit focus on transactions between the firm and its external
constituents.
- A value proposition, that is, the answer to the question: Who are our customers and what do we offer
to them that they value?
- A value constellation, that is, the answer to the question: How do we deliver this offer to our
customers? This involves not only the companys own value chain but also its value network with its
suppliers and partners.
These two components need to fit together like pieces of a puzzle in order to generate:
- A positive profit equation, which is the financial translation of the other two, and includes how value is
captured from the revenues generated through the value proposition, and how costs are structured and
capital employed in the value constellation.
The business model concept offers a consistent and integrated picture of a company and the way it
generates revenues and profit. But, as noted in our cases, Grameens creation of social businesses in
Bangladesh could not be based on simply replicating conventional for-profit business models. New value
propositions and new value constellations had to be created so as to match into a positive profit
equation, as illustrated in Table 1: in effect, building social businesses requires building new business
models.
How to build social business models
Business model innovation is about generating new sources of profit by finding novel value proposition/
value constellation combinations. Hence, we wondered what the literature on this phenomenon offers
to our understanding of building social businesses. As mentioned before, five lessons can be learned
about the Grameen experiences: three are similar to those involved in conventional business model
innovation; two are more specific.

Five lessons in building social businesses
Similarities with conventional business model innovation
1. Challenging conventional wisdom and basic assumptions
2. Finding complementary partners
3. Undertaking a continuous experimentation process
Specificities of social business models
4. Favoring social profit-oriented shareholders
5. Clearly specifying the social profit objective
The social business model framework
Drawing from these Grameen Group experiences, we can highlight the adjustments needed in switching
from a traditional to a social business model framework. The first change is the specification of targeted
stakeholders, and the provision that the value proposition and constellation are not focused solely on
the customer, but are expanded to encompass all stakeholders. The second is the definition of desired
social profits through a comprehensive eco-system view, resulting in a social profit equation. The third is
that the economic profit equation targets only full recovery of cost and of capital, and not financial
profit maximization. Our topic here has been limited to the social impact of social businesses; however
it is important to stress that the social business model can also be applied to environmental issues.
Problems ranging from climate change and water shortages to industrial pollution and high-priced
energy, which are mere nuisances to people in the North, pose life-and-death difficulties for those in the
South.
Conclusion
The harmonious conclusion of social business is producing a better product or service that makes a
positive impact on people's lives. An open leader uses collaboration tools to engage with other leaders
and employees within an organization to bring this about. Social technologies support the levels of
engagement that are necessary in successful, connected organizations. Open leaders use these tools
strategically to connect to advocates and influencers within the organization as well as their ideas and
projects. These connections and the innovation that follows drive product advancement. It is the
leadership and culture that define the level of innovation in your organization.
Social business is less about the technology and more about people making the right connections with
one another. Open leaders see the opportunity for people to work together to a common purpose using
the tools as ways to build a competitive advantage for their organization. Social technology gives
everyone the opportunity to share their ideas and experiences. When organizations adopt or encourage
open and collaborative leadership along with the social tools that empower people to engage,
innovation will increase. John Ruzika with Vistage touched on this point in a recent post about
howstrong social connections increase team innovation -- mentioning social business technology, such
as Jive or Yammer, as an avenue to increased innovation and collaboration.
Open leaders are great listeners. They use social tools to hear what members of the organization are
saying and to connect people and ideas. Being able to build bridges within the organization,
collaborative leaders create a cohesive and synergistic business with internal and external clients. They
reward and amplify other leaders that engage across the organization. Positive psychology used by
leaders in a social experiment presents an opportunity for organizations to increase employee retention
and become incubators for new ideas. A true social business is a network of networks.
If social business offers so many advantages, why is it struggling? Recently,Gartner found that social
business experiments will likely fail due to inadequate leadership support and an overemphasis on
technology. Social experiments are an effort in organizational change -- a change in the way we work.
With a strategic approach and a shift toward open leadership, organizations can be truly social and gain
all the advantages as such.
In her book Open Leadership, author Charlene Li argues that openness is inevitable as "information
leakage" is everywhere due to the adoption of social technologies. She says open leadership requires
tremendous rigor, setting forth strategies and guidelines for the responsible use of collaboration tools as
relationships are redefined across organizations and beyond. Li is arguing for a cultural shift from
conventional management to open leadership. She presents strategies and archetypes for leadership to
adapt to the new, collaborative workplace. Organizations considering social technologies should think
strategically and consider the broader change to their culture and how that ultimately will gain a greater
share of the market.