During recent years, much has been written about Corporate Social Responsibility
(CSR), sustainability, sustainable and ethical supply chains, and the power of
organizations that reaches beyond their core business activities. Social Business, a rather
new form of using corporate power in order to act in a socially desirable manner, was
first established by Professor Yunus, Noble Peace Prize winner (2006). It is in contrast
to charity because it is not a donation or charitable giving but a real investment into a
business. The important difference is that with a social business the entrepreneur or the
participants in a social venture business do not intend to maximize profits but will
always reinvest profits into the business and will keep costs and prices low so a broad
range 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 instead
of for oneself” (p. 4).
Since Social Business is a very new concept, little has been written about it yet. There is
not even a generally accepted and shared definition of the term “Social Business”.
Millions of small social start-ups, whose founders intend to do something socially
beneficial and who only take out from the business the money they need for their own
upkeep, already exist. However, to differentiate between charity projects and real social
businesses is difficult. For this reason, it is impossible to collect empirical data about
these start-ups and projects. Much more in the focus of the public eye are social
businesses founded by multinational companies (MNCs) or at least renowned national
companies. This often includes a product relating to the key competence of the firm
which is adapted to the needs of less-well-off consumers and thereby solves a shared
social problem. MNCs often use the know-how and competence of non-governmental
organisations (NGOs) or similar institutions and start social joint-ventures. Since it is
much easier to collect data about this kind of social business and since their influence
and recognition in industrialized countries at the moment is much bigger than of the
numerous small start-ups, this paper is going to focus on social businesses initiated by
big companies.[...]
Table of Contents
1 Introduction
1.1 Problem Definition and Objectives
1.2 Course of Investigation
2 Stakeholder Theory
2.1 Stakeholders
2.2 Including Stakeholders in Strategic Decisions
3 Inducement-Contribution Theory
3.1 Definitions
3.2 Applying the Inducement-Contribution Theory
4 A Stakeholder Approach towards Social Business
4.1 The Concept of Social Business
4.1.1 Why Social Business?
4.1.2 The Principle of Social Business
4.1.3 Social Business versus Corporate Social Responsibility
4.1.4 Social Business versus Social Entrepreneurship
4.2 Stakeholders’ Inducements for engaging in a Social Business and their Contributions
4.2.1 Stakeholder Theory and Social Business
4.2.2 Managers
4.2.3 Investors
4.2.4 Customers
4.2.5 Shareholders
4.2.6 Competitors
4.2.7 Employees
4.2.8 Non-Governmental Organizations
5 Methodology
6 The Business Case of Grameen Danone Food Limited
6.1 Partners of the Joint Venture
6.1.1 The Danone Group
6.1.2 The Grameen Familiy
6.2 Grameen Danone Food Limited as the First Real Social Business
6.2.1 Evolvement of the Business Idea
6.2.2 Objectives of Grameen Danone Food Limited
6.2.3 Financing of the Company
6.2.4 Support by the Global Alliance for Improved Nutrition
7 Conclusion
7.1 Summary
7.2 Impact and Limitations
Research Objectives & Topics
The primary objective of this thesis is to explore the stakeholder relationships within the emerging field of social business. By applying stakeholder theory and the inducement-contribution theory, the research investigates the motivations and contributions of various stakeholder groups involved in social ventures, with a specific focus on those initiated by large multinational companies.
- Analysis of Stakeholder Theory and its applicability to social business models.
- Examination of the Inducement-Contribution Theory regarding participant motivation.
- Comparison of social business concepts against CSR and social entrepreneurship.
- Detailed case study of the Grameen Danone Food Limited partnership.
- Evaluation of incentives and contributions for managers, investors, employees, and NGOs.
Excerpt from the Book
4.2.2 Managers
The first stakeholders to be mentioned are the people behind the company, i.e. the managers or the owners in the case of a family-run business. Without doubt the question will be raised as to why a manager should be motivated to initiate a social business. Yunus (2008) alleges that economists see humans as only one-dimensional beings whose single aim is to maximize their own benefits and who do not consider other people’s well being (p. 48). According to Yunus this is also the reason why until today only profit-maximizing businesses exist. Anyhow, the contrary is the case: Human beings are multidimensional, with among others an egoistic as well as a social component. In fact, people often act in ways that benefit others, even to their own detriment as Etzioni (1988) and Perrow (1986) state, as cited in Mitchell et al. (1997, p. 872). Different people might possess these characteristics to distinct degrees and the extent to which a characteristic is apparent can also fluctuate over time in one and the same person. This leads to multidimensional interests, which a manger can satisfy by switching between maximizing and social businesses. Yunus (2008) does not accuse people who pander to their own interests; he simply offers a sustainable possibility to business people to also satisfy the desideratum to do something of social benefit (p. 49). Setting up a social business is therefore a chance for business people to leverage their business skills and creativity to solve social problems.
Chapter Summaries
1 Introduction: Provides an overview of the concept of social business, outlining the problem definition and the course of the investigation.
2 Stakeholder Theory: Examines the definition of stakeholders and the importance of including them in strategic organizational decisions.
3 Inducement-Contribution Theory: Details the theoretical framework regarding how organizations balance the contributions made by participants with the inducements offered to them.
4 A Stakeholder Approach towards Social Business: Analyzes the concept of social business, contrasts it with CSR and social entrepreneurship, and identifies the specific roles of various stakeholder groups.
5 Methodology: Explains the qualitative research approach and the rationale for using a holistic single-case study design.
6 The Business Case of Grameen Danone Food Limited: Investigates the practical application of social business principles through the joint venture between the Danone Group and the Grameen Family.
7 Conclusion: Summarizes the findings regarding stakeholder impact and discusses the limitations of the research.
Keywords
Social Business, Stakeholder Theory, Inducement-Contribution Theory, Corporate Social Responsibility, Grameen Danone Food Limited, Poverty, Sustainability, Innovation, Stakeholder Management, Social Entrepreneurship, Multidimensional Interests, Value Proposition, Joint Venture, Business Ethics, Economic Development.
Frequently Asked Questions
What is the fundamental focus of this thesis?
The thesis focuses on understanding the dynamics of stakeholder relationships within social businesses and identifying what motivates different groups to engage with and contribute to these ventures.
What are the core theoretical frameworks used in the work?
The work primarily utilizes the Stakeholder Theory for identification and engagement analysis, and the Inducement-Contribution Theory to understand the balance between individual contributions and organizational incentives.
What is the primary research question?
The research seeks to answer: What are the different stakeholder groups' inducements for engaging in and contributing to social businesses?
Which methodology is applied in the research?
The author employs a qualitative research method, specifically a holistic single-case study of Grameen Danone Food Limited, to verify assumptions where quantitative data is insufficient.
What topics are discussed in the main part of the thesis?
The main part covers the conceptualization of social business, a comparative analysis against CSR and social entrepreneurship, and an in-depth exploration of specific stakeholder groups including managers, investors, customers, and NGOs.
What keywords characterize the study?
Key terms include Social Business, Stakeholder Theory, Inducement-Contribution Theory, Social Entrepreneurship, and Corporate Social Responsibility.
Why was Grameen Danone Food Limited selected for the case study?
It was selected as the primary case study because it represents the first successful social business venture that operates in complete alignment with Professor Yunus’s definition of the concept.
What is the role of the "proximity model" in the case study?
The proximity model is used to organize production, distribution, and consumption within a specific local geographical area, thereby fostering local job creation and reducing logistics costs.
- Quote paper
- Lena Schumacher (Author), 2010, The Business Case of Social Business, Munich, GRIN Verlag, https://www.grin.com/document/229960
