What is meant by the term 'social enterprise' and what do social enterprises contribute to society and the economies in which they operate?
The acceleration with which the world is changing day by day is continuous. A majority of organizations that have a motto of 'not-for-profit' are looking out for prospects with the help of which they can begin or widen their projects in order to get their missions fulfilled and offer the needy the earned profits. Thus, any organization or scheme that brings about the mentioned twofold objectives is considered a social enterprise. Social enterprises sell mission-related goods or services and by doing so they try to create a more impartial and fair environment through specific market-based strategies (Bornstein & Davis 2010).
In other words, a business is regarded as a social enterprise when the main objective is to cope up with the prevailing societal problems and bringing improvement in communal life, peoples' circumstances and positive environmental change. Though it seems that social enterprises work as charities, they do not. They are businesses but of different sorts. Just like other businesses, social enterprises create and accomplish things that produce capital and generate earnings.
However, their objective is different i.e. they aim to work for making bigger differences in society by reinvesting the generated money to do more good in a number of ways. Social enterprises create employment opportunities for people who are jobless otherwise. They reinvest the earned revenue to accomplish community schemes. They also use the generated money to improve and save the environment.
Above all, social enterprises offer significant services for the destitute and impoverished individuals/families in the society (Borzaga & Defourny 2001). For all these reasons, social enterprise can be categorized among the most exhilarating and rapidly developing movements all over the world. There are both big and small social enterprises ranging from cafes to multinational organizations. They are, in general, started by an individual or a group of passionate, dedicated and determined members.
Social enterprise, if truth be told, is a subdivision of social entrepreneurship. Social entrepreneurship can be defined as "an innovative, social value creating activity that can occur within or across the not-for-profit, business, or government sectors and have tried to distinguish it from commercial entrepreneurship in terms of four variables -- market failure, mission, resource mobilization and performance measurement" (Kickul & Bacq 2012). In simple words, it is the ability by which resources can be leveraged to get benefit from marketplace opportunities for the acquirement of social change that is sustainable.
An introduction and short biography of Professor Muhammad Yunus
Professor Muhammad Yunus is considered as the father of microcredit, social business. He is also the founder of worldwide renowned Grameen Bank. Other than that, he has also founded over fifty other companies in Bangladesh. He has been named as one of twelve greatest entrepreneurs of the contemporary times by the Fortune Magazine because of his constant innovation and services in social enterprise.
Professor Yunus was born in 1940 in Bangladesh. In 1965, he received the Fulbright Scholarship for studying economics at Vandervilt University (USA). Afterwards, he completed his Ph.D. In Economics. He then returned to his country in 1972 and joined the department of Economics as Chairman in University of Chittagong. In 1976, Professor Yunus started experimenting with the facility of loans for poor. The project was initially called Grameen Bank Project. However, later in 1983, the project became a full-fledged bank for providing the facility of loans to the poor (Gupta 2006).
The focus was on providing the loans to the women living in rural area of Bangladesh. Grameen Bank has over 8.4 million borrowers today, 97% of which are women and Grameen Bank disburses over one and a half million U.S. dollars on an annual basis. Professor Yunus and Grameen Bank were awarded the Nobel Peace Prize in year 2006.
From universities across more than a dozen countries, Professor Yunus has received more than fifty 50 honorary degrees. This doesn't end here. Professor's exceptional services have also helped him to receive more than hundred awards from 26 countries that also include state honors from ten countries. He is among the seven individuals who received the Nobel Prize, the United States Congressional Gold Medal and the Presidential Medal of Freedom. Professor Yunus had the honor of getting Ramon Magsaysay Award in 1984, The World Food Prize in 1994, Sydney Peace Prize in 1998, and The Prince of Austurias Award for Concord in 1998 and many more achievements are under his belt (Nicholls 2006).
His biggest achievement is Grameen Bank through which he initiated the concept of microfinance from his own money. He started giving loans to poor village women who could not qualify for the loans from conventional banking. His efforts expanded in 1970s leading to the establishment of Grameen Bank in 1983. Bankrolled in part by loans in the 1980s and early 90s, the Grameen Bank has since provided people with self support.
Microfinance has been also spread to many other underdeveloped and developing countries which allowed some of the world's most impecunious people the means to improve their earning status and to initiate their own businesses. The borrowers from the Grameen Bank remained women at large. As already mentioned, Grameen Bank and Professor Yunus were awarded Nobel Peace Prize in the year 2006 for the work which created social and economic development from the below level ("Yunus, Muhammad" 2013).
In a more recent scheme aimed at the elimination of poverty, he called for the creation of businesses which are self-sustaining and their profits could be used for giving aid to the underprivileged. This proposed new economy was outlined in his books as well. Professor Yunus created several ventures in cooperation with several major corporations. In the year 2007, Yunus considered to form a political party in Bangladesh which was abandoned due to the rising tensions with the already established political parties in the country ("Yunus, Muhammad" 2013).
The Awami League-led government was critical of the Grameen Bank and the management of Professor Yunus in 2010, and as a result he was forced out as the managing director. The government later moved for the reduction of the bank's independence ("Yunus, Muhammad" 2013).
What drives and motivates Professor Muhaamad Yunus? A Review of his Entrepreneurial Mindset
In this part, I will discuss the leadership style of Professor under the model of Trait Theory. As far as the leadership style of Muhammad Yunus is concerned, he is a visionary leader who has adopted the transformational leadership style. It is no secret that Muhammad Yunus has been able to successfully transform the 3rd world as the Grameen Bank founder and microcredit pioneer. Transformational leadership can be defined as "a style of leadership in which the leader identifies the needed change, creates a vision to guide the change through inspiration, and executes the change with the commitment of others" (Marshall 2011). Thus, in the light of this definition, Muhammad Yunus has proved himself to be a transformational leader who took the responsibility on his shoulders for the revitalization of the organization he founded to help the destitute in the society.
He defined the change that was needed in the social structure of Bangladesh and created such a vision that brought enlightenment and empowerment among the people who were not so privileged. And he did so by mobilizing commitment to the visions he introduced to his Bangladeshi people by transforming his organization as an example to the world.
Muhammad Yunus transformational leadership brought new vision and new framework for thinking about policies, structures and people. It is a common tradition that a majority of entrepreneurs begin with a clean slate. However, transformational leaders do things differently by starting with a point that is already present. Thus, Professor Yunus also did same by redesigning the outdated and obsolete societal systems as an architect. He got motivated by an inner light that helped him to identify his individuality as a change agent. He used both his private and professional image for making a difference in the society and transformed the Grameen Bank in the most excellent of ways.
His courage, determination, risk-taking nature helped him to make Grameen Bank a transformational organization. His democratic and transformational leadership style made him to believe in the people. He has proved himself to be a leader who is concerned about the well-being of others especially the needy and the impoverished. In the end, he has been successful in empowering the people which crystal clearly makes it obvious that his heart is sensitive to the needs of others.
Because of his value-driven ability, Muhammad Yunus also introduced a set of core values and demonstrated an attitude toward others that was rather harmonious and went well with his position. Professor Yunus has been able to manage translating the visions he introduced into practical actions. By doing so, he has not only empowered and changed the lives of his fellow countrymen but also the people living outside his country. His…