Nobel prize winner Muhammad Yunus is known for pioneering microcredit in Bangladesh and for showing how small but significant changes can transform the lives of poor communities. More recently, and in his 2010 book Building Social Business, he has outlined an approach to enterprise that meets human needs rather than rewarding shareholders.
This last weekend, Yunus was at our University to talk about his work and to promote the concept of social business in our part of the world. Writing ahead of his visit, he set out the opportunities for addressing economic inequality across the north west: “I am looking forward to my visit to the Greater Manchester area and in particular to the University of Salford, which has such a strong connection to its local community and does important work in helping to address the needs of the people of the area. My visit will allow me to meet with many people who are already involved in important work to address the needs of society and their local communities”.
Our Business School has taken this opportunity to announce the launch of a Centre for Social Business. Led by Dr Morven McEachern, the Centre will pull together existing academics from across the University who are already working in this area: Morven’s own expertise is in the ways that smaller businesses incorporate social objectives into their activities. Others who will come together to launch this programme are working in areas such as social objectives in transitional societies, social justice and consumer rights, and responsible retailing and enterprise.
Amanda Broderick, Dean of the Salford Business School, has set the vision of the new Centre as leading thinking on social business, with a view to developing business practices that go beyond regulatory compliance and which create value for their stakeholders: “there is a need for more and improved data collection to inform policy in this area, as well as to provide evidence of the impact of social business in both developing and more developed economies, countries and environments. One of the potentially fascinating aspects of this global movement is the extent to which experience gathered in developing countries can inform activity in the developed world”.
Muhammad Yunus is clear about what a social business should be, and what it is not: “the investment decision made by a social business is not based on the potential profit. It is based on the social cause”. As such, a social business should be self-sustaining, with investors never taking any dividend beyond the return on the original amount that they put in. A social business can be a non-loss, non-dividend company devoted to solving a social problem, or it can be profit making to the benefit of low income communities.
In Yunus’s definition, a social business is a “non-loss, non-dividend company with a social objective”. He sees his time spent with us in Salford as an opportunity to kick-start such initiatives: “this summit will allow us to explore how social business can be utilised as a tool by the people of the area to make a real and lasting difference by addressing some of the major challenges faced by the poorest people in the North West of England. As I travel the world, I am continually struck by how people, particularly young people, are responding to this message, seeking new ways to build business solutions to tackle poverty and other challenges”.
Muhammad Yunus, “Building Social Business: the new kind of capitalism that serves humanity’s most pressing needs”. New York, 2010.