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Power of Social Business in Poverty Alleviation

In: Business and Management

Submitted By rasedmfin
Words 3819
Pages 16
F-532: Business Research Methodology and Econometrics

Submitted to,

Dr. M. Jahangir Alam Chowdhury
Department of Finance
University of Dhaka

Submitted by,

Md. Rased Mosarraf

MBA ID No.: 16-469
BBA ID No.: 16-062
MBA, 16th Batch
Department of Finance
University of Dhaka

“Poverty does not belong in civilized human society. Its proper place is in a museum. That's where it will be.” –Dr. Muhammad Yunus

Date of Submission: July 19, 2016


Letter of Transmittal
July 19, 2016
Dr. M. Jahangir Alam Chowdhury
Department of Finance
University of Dhaka

Subject: Submission of Research Paper.

Dear Sir,
I am very glad to submit you the paper on “Power of Social Business in Poverty Alleviation”. I would like to say that this paper is helpful for me to know about the social business concept. I am very thankful to you for giving us such a fantastic opportunity to make a paper on this topic.

I have tried my best to make this report meaningful by providing necessary information.

Yours sincerely,
(Md. Rased Mosarraf)
MBA Roll: 16-469
BBA Roll: 16-062
Department of Finance
University of Dhaka


Table of Contents
Introduction ................................................................................................................................................. 1
Literature Review ....................................................................................................................................... 2
What is a Social Business? ......................................................................................................................... 3
Types of Social Businesses .......................................................................................................................... 3
Seven Principles of Social Business ........................................................................................................... 5
Social Business Model vs. Traditional Business Model ........................................................................... 6
Implications of Social Business for Social Welfare .................................................................................. 7
Social Business in Bangladesh.................................................................................................................... 8
Limitations and Criticism ........................................................................................................................ 11
Poverty Situation in Bangladesh and the Scope of Social Business ...................................................... 12
Conclusion ................................................................................................................................................. 12
References .................................................................................................................................................. 13


Abstract: Poverty is one of the major problems around the world. Prof. Dr. Muhammad Yunus has come up with an idea to solve that problem by introducing the social business concept which emphasizes a combined and organized effort of poverty alleviation through self-sustaining business mechanism. This paper attempts to overview of the idea, discuss current practice of social business in Bangladesh; and compare social business model with other existing business models.

The present world is dominated by free market concept. The free market concept comes from the capitalist economy. The profit maximizing motive is consistent with capitalist economy which is largely responsible for increasing poverty all over the world. In this situation, the United Nations
Development Program (UNDP) in 2000 set number goal of halving extreme poverty (the proportion of people living on less than $1 per day) by 2015. More than a decade has passed since declaration. But still 1 billion is in the pool of extreme poverty. Under the traditional capitalism corporate social responsibility is emerged in order to enable it to protect the interest of the poor people as well as profit earning activities. But CSR is not regarded as effective instrument in removing poverty from society, country as well as from the world. Because companies are not sincere about their CSR activities. They don’t pay much more attention to this. They use it as a weapon for increasing their profit. The government can provide products and services to the poor people at lower prices without any profit motive to fulfill social objective like poverty alleviation but government alone cannot solve all the societal problems. The NGOs run by developed countries can help to alleviate poverty in developing countries. But these NGOs are run through charity, aids and donations. Without donations and charity NGOs become ineffective. In view of these problems, the necessity for social business increases in the developing countries. Purpose of social business is to achieve one or more social objectives through the operation of the company through sustainability, no personal gain is desired by the investors. The motto of this type of business is to increase the economic condition of the poor people of the society as a whole.


Literature Review
The Social Business is a very recent concept. So it does not include sufficient studies upon which the paper can be prepared.
Bylund and Mondelli (2009) have marked that free-riding is one of the problems in the evolution of social business. They are not satisfied that social business is not a widely observed phenomenon because of a weaker incentive to minimize cost and maximize output. They term social business as a very difficult enterprise.
Wimmer (2012 at the time of analyzing the activities of Grameen Shakti, describes how a social business can change the daily lives of rural population. She sees the sense of responsibility to the society as the driving force of such a business company. She posits positive outlook regarding the social businesses.
Referring to the aspects of public health, Donaldson (2011) analyze the reasons why social business represents an important area of consideration for public policy given the limits of traditional businesses. He observed that social businesses in the health care contexts as well as in the non-health care contexts can have a considerable impact on health and overall wellbeing.
According to Sattar (2012), social business wheels the pursuit of profit maximization and hence gives some relief from the capitalist system.

This study attempts to discuss the overview of the idea, current practice of social business in
Bangladesh and comparison of social business model with other existing business models.

 To evaluate the social business scenario in Bangladesh; and
 To identify some limitations and criticism of social business concept.


What is a Social Business?
A social business is defined as a business entity which is run on the basis of “non-loss-nondividend” motive and the ultimate goal of which is to solve social problems especially those related to poverty. In Yunus‟ words, “A social business is designed and operated as a 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 payback investments to its owners, but whose primary purpose is to serve society and improve the lot of the poor”. (Yunus and Weber
A Social Business can roughly be characterized by the following properties:
 It is not primarily a charitable organization, but a competitive enterprise.
 It needs to recover its full costs in order to achieve self-sustainability.
 The owner never receives any profits/dividends. He, however, is entitled to get back his invested amount only.
 Profit can be reinvested to expand the business. It can also be passed on to target group such as poor people by lowering price and providing better service.
 A social business aims at maximizing social benefits instead of profit. It tries to achieve social objectives rather than personal gain.
World renowned weekly business magazine Business Week commented on social business this way, “……Yunus goes beyond microcredit to pioneer the idea of social business- a completely new way to use the creative vibrancy of business to tackle social problems from poverty and pollution to inadequate health care and lack of education. Yunus’s “Next Big Idea” offers a pioneering model for nothing less than a new, more humane form of capitalism.” (Yunus and
Weber 2007b)

Types of Social Businesses
Yunus classified social business into two types on the basis of its construct (Yunus and Weber
2007a). They are Type I and Type II.

Type I: This type includes those companies that are established with a view to achieving a specific social, ethical or environmental goal through providing goods or services at a price easily reachable


by the members of the target group. Grameen Danone, a yogurt producing company operating in
Bangladesh, may be given as an appropriate example of Type I company. It has been established with the particular objective of solving nutrition problem in the rural area among the poor population. The yogurt it produces has high content of vitamins and other nutritional elements.
The price of yogurt is set at a level just enough to recover the cost excluding entrepreneurs‟ profit and thus enabling poor parents to meet their children’s nutritional need.

Type II: This type of business is run by the poor people and they are owners of this type of business. Although business is operated on traditional basis under this framework. While in Type
I case poor people enjoy the benefits by acting as buyers, in the Type II case they gain the benefits by playing role of sellers. Grameen Bank may be set in place as an example of Type II Company, because it is predominantly owned by thousands of poor. However, the Grameen Bank also has characteristics of Type I. Since its inception it has been extending credit facilities to the underprivileged who otherwise would have been with little opportunity to access in the credit markets. Social Business versus Profit Maximizing Business (PMB) and Not-for-profit Organizations
There are both similarities and dissimilarities between social business, PMB and not-for-profit organizations. A comparison is made in Table-1.
Basis of comparison Profit maximizing business Profit equation Economic profit equation exists.

Dividend distribution Not-for-profit organizations Dividend is distributed to owners or shareholders Social responsibility No responsibility to fulfill social objectives except some legally non- mandatory CSR.

No economic profit equation No dividend is distributed. Objective is only to fulfill social goals.


Social business

Economic profit equation exists.
No dividend is distributed to owner beyond the capital invested.
Main objective is to fulfill social goals and objectives.

Return of capital Selfsustainability

Driving factor Owners and financiers of the business

Main concern Capital is returned to the owners and shareholders No return of capital

Dependency on charities and donations Self-sustainability must be ensured.

Profit driven business Social welfare driven business

Capital is returned to the owners and shareholders. Self-sustainability must be maintained.

Social welfare driven business

Owned and financed by shareholders Owned by none but financed by donors

Owned and financed by borrowers

Competition is prevalent among firms.

No competition with one another.

Competition among firms is possible. Only concerned about shareholders‟ profit maximization Only concerned about social profit maximization Concerned about social profit maximization as well as recovery of full cost Seven Principles of Social Business
With a view to establishing and running a social business company, certain standards and norms must be maintained and followed towards reaching the intended social goals. Dr. Muhammad
Yunus and Hans Reitz, the co-founder of Grameen Creative Lab, figured out seven principles to follow (Yunus and Weber 2010):
 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.
 Financial and economic sustainability


 Investors get back their investment amount only. No dividend is given beyond investment money  When investment amount is paid back, company profit stays with the company for expansion and improvement
 Gender sensitive and environmentally conscious
 Workforce gets market wage with better working conditions
 Do it with joy.

Social Business Model vs. Traditional Business Model
In the conventional framework of business, a successful business model consists of three components. They are value proposition, value constellation and profit equation. Business model in the social framework has also three components. But here the structures of the components are somewhat different. In case of social business model profit equation is categorized into two sub components such as economic profit equation and social profit equation. This classification is made to incorporate broad range of stakeholders and to consider environmental and other social issues. Moreover, the economic profit equation targets only full recovery of cost and capital, and not financial profit maximization. Figure 1 and 2 may be helpful in understanding the difference between the components‟ structure of traditional and social business model.

Value constellation
Internal value chain
External value chain

Value proposition

Profit equation
Sales revenue
Cost structure
Capital employed
Figure 1: Components of traditional business model


Social profit equation
Nutritional profit
Employment profit
Environmental profit

Value constellation
Internal value chain
External value chain

Value proposition

Economic profit equation
Sales revenue
Cost structure
Capital employed
No economic loss
Full recovery of capital
Figure 2: Components of social business model

Implications of Social Business for Social Welfare
Upon which the social business is formed is the welfare of the society as well as poor people.
There is consistency between real life social business and theoretical discussion. Some of the reasons for which we can say social business plays crucial role in alleviating poverty from the society as a whole are discussed below:

Poverty alleviation: Removing poverty from society as well as from the country is the final goal of the social business. We have already discussed about the two types of social business. First one increases the living standard of poor people by purchasing basic needs at a reachable price. On the other hand, type 2 focuses on making them self-reliant and self-entrepreneurs by being owners of the business organizations.

Employment generation: Social business can create huge employment opportunities for the people of the society through supply channels, production and distribution channels. From making


products up to reaching products to the customers need people to complete the process. By the construction of the model poor people will get the priority in the recruitment process of a social business company.

Low price goods and services for the poor: Social business is supposed to provide low price goods and services such as education, food, nutrition, sanitation, technology etc. Lower price may become the main competitive advantage of the social business.

Protecting environment: In the seven principles of social business, it is urged to be serious about the environmental pollution. Environment is severely hampered in case of doing conventional businesses. So in the guideline of social business, it is urged to follow the policies which will be the best interest of the society and environment. As a result, the economy will produce more products without harming the environment.

Health care for poor: One of the reasons for our extreme poverty is that the poor have to sell their last resort for treatment. There are government efforts to provide free or low cost treatment but these are insufficient. So, many poor people either die or lose even their last resort. Social business may be of great help in ensuring health care for all those who are below poverty line.

Removing social unrest: Unemployment and poverty are the major sources of social unrest.
Thus, fulfilling basic needs and generating employment social business can fix the problem of social unrest.

Social Business in Bangladesh
There are six companies in Bangladesh which have been established as social businesses under the direct supervision of Dr. Muhammad Yunus. They are namely Grameen Danone, Grameen
Veolia, BASF Grameen, Grameen Intel, Grameen GC Eye Care Hospital, Grameen Bank. These companies are producing yogurt, water, mosquito net, IT product and eye care services, and micro credit respectively. Table2 illustrates the facts and social impacts of these companies.


Table-2: Social business companies in Bangladesh: their activities and social impacts


Social Impacts

Ownership: 90% by the borrowers, 10% by the government Launching date: October
Product: Microcredit with no
collateral and minimum paper
Special feature: Bank officials goes to the borrower directly and monitors the loans how loan is utilized Ownership: Grameen group
and French Group
Danone 50%
Launching date: late 2006
Danone Food Product: Yogurt
Special feature: Uses solar and biogas energy

Grameen GC
Eye Care

group and The Green
Launching date: May 2008
Eye care especially cataract operation
Special feature: Charges patients according to their ability to pay


 Vicious circle of poverty started breaking. 64% of the borrowers who have been with the bank for 5 years or more have crossed the poverty line.
 Huge self-employment by the poor people has taken place.  Poor parents now have low cost solution to the malnutrition problem of their children.
 Many including Grameen members got employed

 Preventing blindness
 Employment generation

GrameenVeolia Water

Grameen BASF

Grameen Intel

Healthcare Services and
Launching date: March
drinking water Special feature: Treats surface water according to WHO standard  Elimination of water transmitted diseases and arsenic related disease
 Employment generation

group and BASF SE
Germany Launching date:
March 2009 Product:
Impregnated mosquito net, micronutrient sachets
Special feature: Provides high quality products at low cost  Protecting the poor from mosquito transmitted deadly diseases
 Providing essential nutrients for the poor
 Employment generation

Ownership: Grameen Trust and Intel
Launching date: 2009
Information communication technology
(ICT) solution to health and agriculture related problems
solutions in remote rural areas.

 Most advanced solution to health and agriculture related problems with minimal time and reachable cost
 Employment generation

Source: Information collected from


Limitations and Criticism
Motivational factor: Yunus said, “Social passion motivates an entrepreneur to run a social business”. But social passion is not a regular phenomenon rather can be seen as accident. Only the social passion is not enough to run a social business. The depth of the social passion makes a man entrepreneur to run a social business.

Performance Measurement Criteria: The main purpose of social business is to achieve the societal goals. But it is not clear to measure performance of this business. As there are some qualitative data in this objective. Besides, no concrete tools are used performance measuring criteria. So it is difficult to measure qualitative data in consideration.

Free Riding Problem: We know that social business is run for the betterment of the society as a whole. So it is public goods in nature. So each and every company should compete with each other in a cooperative manner to bring about social improvement. But it is well known that public good as well as group action without individual interest generally involves free-riding problem.

Time Value of Money: In social business, the owner who invests the fund is paid back only the original amount after a specific time period and he is not entitled to get any profit. But as there is no consideration of time value of money the owner may bound to bear loss.

Misuse of social business: When a person involves in social business he or she can do the betterment of the society as well as he can perform the profit maximization. So there is a great possibility of misuse of the social business as a promotional tool for product market or experiment achieving tool for their profit maximizing business. On the other hand, as investors have no individual interest, there might arise callousness on the part of entrepreneurs.

Special Quality and Special Risk: As the social business is run for social welfare and no individual interest, it is questionable quality of the products. Sometimes the entrepreneurs have to take highly risky decisions. But the question is whether any such highly skilled person will be interested to take the risk without any individual profit.


Poverty Situation in Bangladesh and the Scope of Social Business
According to the Household Income and Expenditure Survey (HIES) of Bangladesh Bureau of
Statistics (BBS), the national poverty headcount rate in Bangladesh has declined gradually but still it was 31.5 percent. The survey also reports that 17.6% (approximately 25 million) people of the country were living in extreme poverty.
Poverty is one of the biggest problems in our country. So an effective and realistic efforts must be taken to reduce obstacles on the way to acquire the goal of halving poverty by 2015, which is the highest priority among the Millennium Development Goals (MDGs). Social business can be considered an important tool in this regard. Bangladesh government in a report entitled “A
Situation Analysis Report on Poverty and Hunger (MDG 1) Bangladesh - A Baseline for Needs
Assessment and Costing” identifies the following four challenges in reducing poverty: reducing hunger and malnutrition, youth employment, promoting pro-poor growth and expansion of urban employment. In fact, these challenges can be alleviated to large extent through social business. We have mentioned earlier that several social business companies are already in operation in this country and they are apparently on a trajectory of success. The father of microcredit and social business Dr. Yunus was born in our country. So I think that the opportunities for social business in our country is promising.

The position of social business is still in its rising stage. Since it is new and incomparable issue, it takes more time to reach mature structure in both conceptual and operational stage. It is urgent to alleviate poverty from our country as well as from the world because poverty is the main culprit for committing most of the crimes. It can be said that winning the war against poverty in
Bangladesh requires innovative efforts like promoting the idea of social business model and proper implementation of them. Bangladeshi people don’t realize the importance of social business fully although Dr. Muhammad Yunus’s business model are now used in many countries of the world.
Dr. Yunus said about this, “It’s not surprising, because people in Bangladesh basically think knowledge always came from the west. They don’t pay attention to somebody who is doing crazy things next door".


1. Akteruzzaman, Md. (undated). “A Situation Analysis Report on Poverty and Hunger
(MDG 1) Bangladesh - A Baseline for Needs Assessment and Costing”. General
Economics Division, Planning Commission, Government of the People’s Republic of
Bangladesh & UNDP Bangladesh.
2. Bangladesh Bureau of Statistics, (2010). “Household Income and Expenditure Survey
(HIES)”, the Government of Bangladesh, Dhaka.
3. Bylund, Per L. and Mario Mondelli, (2009). “Book Review: Creating a World without
Poverty: Social Business and Future Capitalism”, The Electronic Journal of Sustainable
Development. Available at:[ Accessed on August 24, 2015]
4. Yunus, Muhammad, Moingeon, Bertrand and Lehmann-Ortega Laurence, (2009).
“Building Social Business Models: Lessons from the Grameen Experience”. Working
Paper 913, HEC, Paris.
5. Yunus, Muhammad and Karl Weber, (2007). “Creating a World without Poverty: Social
Business and Future Capitalism”. Public Affairs, New York.
6. Yunus, Muhammad and Alan Jolis, (2007a). “Banker to the Poor: Micro-lending and the
Battle against World Poverty”. Public Affairs, New York.
7. Younus Center website available at [Accessed on
August 25, 2015]
8. World Hunger website available at articles/ Learn/ world%20hunger%20facts%202002.html. [Accessed on August 25, 2015 ]
9. Wimmer, N. 2012. “Green Energy for a Billion Poor: How Grameen Shakti Created a
Winning Model for Social Business”. MCRE Verlag UG. Available at: [Accessed on August 25, 2015]
10. United Nations Development Program (UNDP) website available at: [Accessed on August 24,
11. Sattar, Z. 2012. “Social business: Turning Capitalism on its Head”. Available at: [Accessed on August 24,


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...“Conversion of Community Banks to Microfinance Banks will enhance the assessment of women entrepreneurs to financial resources”. Discuss Evaluate the impact of SEEDS in the implementation of MDGs in Nigeria Analyze the impact of Globalization on the economic Development of Nigeria The incidence of the Niger Delta militants groups and its consequences to entrepreneurial development in Nigeria Evaluate the power, composition and functions of NDDC Assess the impact of the multinationals in the Nigerian Economy with regard to FDI and FPI Youths and entrepreneurial Development: Realty or Myth Evaluate the implementation of MDGs and the realization of the objectives by 2015. The effect of entrepreneurial development on poverty reduction The impact of privatization on Nigerian economic development and growth. Evaluate the impact of different reforms in the Nigerian reforms on the Nigeria economy. Women entrepreneurial development (WED) and poverty: what a paradox The impact of women entrepreneurs in SMEs on poverty alleviation Evaluate the cultural factors in Nigeria and entrepreneurial development. Evaluate the financial factors in Nigeria and entrepreneurial development. Evaluate the environmental factors in Nigeria and entrepreneurial development. Gender, entrepreneurship and globalization: Barriers and prospects. Intrapreneurship and achievement of organizational objectives Evaluate intrapreneurship as a motivational concept in an organization Assess the...

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...Chapter 1 THE PROBLEM AND REVIEW OF RELATED LITERATURE Introduction Poverty is a condition where people's basic needs for food, clothing, and shelter are not being met, which remains at the core of concept today. However, “food, clothing, and shelter” are itself no less problematic than the concept of poverty. Townsend (2010) posited that people can be said to be in poverty when they are deprived of income and other resources needed to obtain the conditions of life such as the diets, material goods, amenities, standards and services that enable them to play the roles, meet the obligations and participate in the relationships and customs of their society. In most developing countries, poverty is more widespread and severe in rural than in urban areas. According to International Fund for Agricultural Development (2011), the largest segment of the world’s poor is the women, children and men who live in rural environments. These are the farmers and herders, the fishers and migrant workers, the artisans and indigenous peoples whose daily struggles seldom capture world attention. Furthermore, Olinto (2013) cited that more than three quarters of those living in extreme poverty are in rural areas and nearly two thirds of the extremely poor earn a living from agriculture. The world of today performs strikingly well in terms of important measurable indicators of human development: nearly all children are immunized, almost all children of school going age are enrolled and......

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...Development Programme SOCIAL DEVELOPMENT AND POVERTY ELIMINATION DIVISION WP 5 GENDER AND POVERTY* Nilüfer Cagatay May 1998 WORKING PAPER SERIES *The responsibility for opinions in these articles, studies and other contributions in this series rests solely with their authors, and publication does not constitute an endorsement by the United Nations Development Programme or the institutions of the United Nations system. Table Of Contents Introduction I. Women And Poverty: Are Women Poorer? II. From Women and Poverty to Gender and Poverty A. Engendering Poverty Analysis B. New Conceptualizations of Poverty C. From Consumption/Income Poverty to Human Poverty D. Are Women Poorer?: Revisiting the Question from a Human Poverty Perspective E. Assessing Gender Differences in Poverty: Quantitative versus Qualitative Approaches F. Do Gender Inequalities Increase Overall Poverty? III. What Is To Be Done? What Is Being Done? A. Gender Mainstreaming at UNDP B. Engendering Anti-Poverty Projects and Programmes Figures Figure 1: A Pyramid of Poverty Concepts Boxes Box 1: Chile: Targeting Female Headship for Combating Poverty Box 2: Gender and Poverty in Guinea: Human Poverty versus Consumption Poverty and Participatory Approach to Poverty Assessment Box 3: South Asia Poverty Alleviation Program (SAPAP): The Case of India Social Mobilization through Self-Help Groups 1 “The causes and outcomes of poverty are heavily engendered......

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Poverty Benchmark

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The Impact of Microfinance Institution on the Economy of Nigeria

...3 Concept of Microfinance 3 The Goals of Microfinance Institutions 5 Impact of Microfinance on the Economy of Nigeria 6 Negative Impact of MFIs on the country (Nigeria) 10 Conclusion Introduction Since the advent of microfinance institution in Bangladesh in the mid 1970’s, several countries have copied this financing model. The Nigerian governments over the years have had to grapple with poverty and unemployment. The realization that many of these poor and/or unemployed persons are not without skills, ideas and willingness to work, must have propelled the government to make finance accessible to them. The seeming popularity of this model among developing countries is predicated on poverty reduction prospect it offers. The Nigerian government cued into this popular thinking in 2005 when it inaugurated the microfinance institution scheme. This was founded to provide finance to economically active poor excluded from financing by conventional banks, provide employment, engender rural development and reduce poverty.  The introduction of microfinance institutions in Nigeria is the inability of Nigerian Deposit Money Banks to provide sufficient financial service to the rural poor. Microfinance institutions have taken up the challenges of the gap created by the Nigerian Deposit Money Banks. Microfinance institutions can be seen as an economic growth method intended to advantage the low income part of a given country like Nigeria, both rural......

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...Qingwei Rachel Crumpler Business and its Publics: Section 29 May 12, 2013 TOMS Shoes and the Effective Creation of Shared Value Over the last 30 years, absolute poverty worldwide has fallen 20%, yet poverty levels in Africa have remained static, hovering around 40% of the continent’s population over the same time period (“Poverty”). Poverty is endemic to many developing nations in Africa, and many attempts have been made to ameliorate the socio-economic toll that it wreaks on the region. However, the continued predominance of poverty in the region today makes it clear that previous attempts at traditional poverty eradication have failed. More recently, the rise of social entrepreneurship has revitalized the discussion about poverty alleviation, with companies committing themselves to creating transformational benefit for the disadvantaged segments of society (Martin 151). TOMS Shoes is such a company that has made a commitment to social responsibility. Unfortunately, TOMS and its footwear draws a great deal of criticism, and there is mounting evidence that creating shared value, as seen in Oliberté Footwear’s business model, is a more effective route to poverty alleviation. Ultimately, we must carefully consider the advantages of Oliberté’s shared value over TOMS’ social responsibility, and call for future social business models to take note of what both of these social enterprises do right and wrong to create the best solution for bringing upward social mobility to......

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Problems in Developing Small Scale Industries in Bangladesh

...developing small scale enterprises in Bangladesh, which are discussed below: Individuality: Maximum small scale enterprises are owned by the individuals and an individual has obviously some limitation. Lower Per Capita Income: Per capita income of our people is low and for this reason our people are not being able to generate adequate capital to run the business efficiently. Unskilled Human Resources: Human resources of our country are not skilled this is a problem with developing small scale enterprises in Bangladesh. The economic environment of our country is not hundred percent suitable for operating the business another cause of the restrictions. Excessive import of foreign product: Excessive import of foreign product in our country is another reason cause when the people of the country will be mainly dependent on the imported product then the entrepreneurs will loose their interest to develop small scale enterprises. Political instability: Political instability of our country is another reason for developing the small scale enterprises rate slow. Political environment of our country is not suitable enough to run the efficient business in our society. Deterioration of Morality: Public moral is getting down means most of our people are loosing their moral and for this reason developing small scale enterprises in Bangladesh is not so easy like the other country of the world. Security reason: Security reason is a strong reason which is effecting the developing of......

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