Principles of Social Business

Professor Muhammad Yunus of Bangladesh has announced the concept of social business. Unlike businesses that provide other concepts or the same name, this is unique as social business is based on specific principles. There are seven of these principles that are known as the principles of social business.

As with other principles, the seven principles of social enterprises define the purpose and mechanism of social enterprises. They outline the priority sectors of organizations or individuals adventuring to enter this field and decide how to manage their finances.

The first principle of social enterprises defines the purpose of existence of social enterprises. The business goal of social enterprises is to overcome poverty and deal with issues such as education, nutrition, healthcare, the environment and provide technical support to people who are oppressed as well as profits and wealth of shareholders .

The second principle is economic and economic sustainability. This is both an organization's perspective and an organization's goal. Social companies such as grants and NGOs are not allowed to raise funds from outside. People who run this business should invest

The third principle determines the return on investment. Investors in social enterprises are not allowed to obtain funds other than their investment. Investment has no dividend

In order to expand and improve the business, it is necessary to reinvest investment amount obtained by investment. The extension here is to reach out to more people, or improve the quality of service

Social enterprises should be responsible for environmental health. They will play an important role directly or indirectly in environmental improvement. Indirect is to ensure that they do not harm the environment through their business.

A fair salary according to industry standards will be paid to those working with companies. In addition, the labor force will get better working conditions

Social enterprises are not aimed at maximizing profit. Therefore, only people who are eager to contribute to society and the environment will implement social business. This means that the company operates in a happy and stress-free environment.

These seven principles were offered by Professor Muhammad Yunus in collaboration with Hans Reitz, co - founder of Grameen Creative Lab. These principles are very simple and easy to follow. They distinguish social enterprises from other companies in the sense that they promote social welfare, so they are important.

Following the seven principles of social enterprises, there are organizations that promote or operate social enterprises worldwide. Ashoka, Omidyar Network, NIKA Water Company, USA, Grameen Bank of Bangladesh are examples of such organizations.

This article was written by Prachi Juneja and reviewed by the Management Learning Guide content team. The MSG Content Team consists of experienced teachers, experts, and subject matter experts. For more information, please click "Company Profile". Use of this material is free for learning and educational purposes. Please contact the creator of the content being used, such as the link to ManagementStudyGuide.com or the URL of the content page.

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The first principle of social enterprises defines the purpose of existence of social enterprises. The business goal of social enterprises is to overcome poverty, or simply to provide technical assistance to education, nutrition, medical care, the environment, and oppressed people, not profit or shareholder wealth. These seven principles were offered by Professor Muhammad Yunus in collaboration with Hans Reitz, co - founder of Grameen Creative Lab. These principles are very simple and easy to follow. They distinguish social enterprises from other companies in the sense that they promote social welfare, so they are important.