Social Business Enables Corporations to Achieve Social Impact and Tangible Business Benefits

KUALA LUMPUR, MALAYSIA--(Marketwired - Nov 8, 2013) -  Many corporations are seeking ways to use their business expertise to address the challenges faced by society. At the same time social organizations are looking to the private sector for the best practices, skills, and knowledge needed to deliver greater value and increase operational efficiency. Within this context, the concept of "social businesses" -- companies with the primary objective of solving a social problem by applying business principles -- has attracted particular attention.

The report, "The Power of Social Business," takes a closer look at social businesses from the perspective of a corporate organization. It has been written in collaboration with Professor Muhammad Yunus, Nobel Peace Prize Laureate 2006, founder of the Grameen Bank, and early developer and implementer of the social business concept -- and launched formally today at the Global Social Business Summit in Kuala Lumpur.

The findings of the report are based on an in-depth analysis of the lessons learned from ten social businesses operating in Bangladesh. Each business tackles a different social problem affecting the poorest of the poor; many are joint ventures between a Grameen organization and a multinational corporate partner. The report highlights the value unleashed through the concept, with a special focus on the lessons and best practices needed to succeed.

A social business is a company created for social benefit rather than private profit. Like an NGO, it has a social or environmental mission, but like a business, it generates its own revenues to, at a minimum, cover its cost. Applying business principles to social problems can increase the effectiveness and efficiency of the solutions and create long-lasting, self-perpetuating benefits.

"A charity dollar has only one life. A social business dollar can be invested over and over again," explained Professor Muhammad Yunus, chairman of Yunus Social Business and coauthor of the report.

But beyond the social benefits, various business benefits for participating corporate partners also became evident: Unlike traditional, donation-based corporate social responsibility (CSR) activities, social businesses allow companies to directly use their skills, expertise, and business network to address a particular social problem. In this way, social business activities can be aligned with the core commercial business. If designed and managed effectively, this alignment not only generates lasting social impact but also can lead to tangible business benefits.

According to the corporations surveyed, the most important business benefit that social businesses can provide is the potential for learning and innovation. All along the value chain, companies have found that approaches and innovations aimed to better reach those most in need in fact can also have broader commercial applications and can be a source of competitive advantage for the core business. A less tangible but equally important business benefit is providing a sense of purpose and personal and professional development opportunities to employees. Companies engaging with social businesses can provide their employees experiences particularly valued by today's "Millennial" generation -- thereby strengthening employee engagement, job satisfaction, and retention.

"Social business can be a powerful vehicle for corporate social engagement as it allows companies to directly use their skills, expertise, and business network. By aligning social activities with the core business in this way, they can also become a source of innovation and competitive advantage," said Ulrich Villis, European Leader of BCG's Social Impact practice and coauthor of the report.

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group
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About Yunus Social Business
Yunus Social Business (YSB) creates and empowers social businesses around the world to sustainably solve social problems. Cofounded by Professor Muhammad Yunus, YSB initiates and manages incubator funds for social businesses in developing companies. YSB aims to promote livelihoods and development with a focus on vulnerable and underserved communities by scaling up market-oriented and self-sustaining businesses that are designed to address pressing social or environmental problems. Its team of consulting, entrepreneurial, venture capital, and development experts is based in Germany, with subsidiaries in Haiti, Albania, Colombia, Brazil, Tunisia, and Uganda. For more information, please visit http://www.yunussb.com.

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