"Book Club for the 21st Century"

An Executive Summary

Book: Creating a World without Poverty: Social Business and the Future of Capitalism
Author: Muhammad Yunus, Nobel Peace Price winner

Introduction
There are several organizations today that look to combat humanities most complex problems. Governments, NGOs, non-profit organizations, and multilateral development organizations all look to do their part in alleviating and diminishing concerns from global warming and pollution to poverty and hunger. Although their contributions are essential, to date they collectively have not been able to effectively solve these complex global issues. Now at the beginning of the 21st century, Muhammad Yunus calls for a new type of organization to be the leader in solving today’s problems, what he coins the “social business.”

Brief Overview
The Core Message
Many businesses in today’s free market possess significant power and resources. In addition, they contain some the world’s most innovative thinkers and leaders. However, capitalism or the free market is one-dimensional. The end goal of these businesses and their leaders is ultimately to maximize profit. Consequently, social and environmental issues are often not taken into account. Yunus proposes that we must harness businesses potential power and creative capacity not to maximize profit, but rather to make a positive social difference in the world. This is the underlying premise of the social business, that the business can be used as a medium to solving our world’s most complex social and environmental problems, particularly poverty.
The Content/Coverage
The book is segmented into three parts. Part 1 explores what exactly a social business is, what it isn’t, and the many details that surround this creation or idea. Part 2 recalls Yunus’ Grameen experiment, its evolution leading all the way up to his creation of the first social business: Grameen Danone. Lastly, Part 3 looks at social businesses potential future in eliminating poverty.
Grameen Danone
The book opens with Mohammad Yunus reflecting on his first meeting with the CEO of Danone, Frank Riboud in October 2005, a meeting that turned into the creation of the first social business: Grameen Danone. Grameen Danone is a joint venture between Yunus’Grameen Group and the multinational dairy company based out of France, Danone. Its purpose is to reduce poverty by providing nutritional fortified yogurt (at an affordable price) to the poor. Its manufacturing and distribution also involve local communities. Grameen Danone built its first plant in Bangladesh, employing local workers, local suppliers, and local distributors. Just as with his micro credit program, there is the idea that if it works in Bangledesh, once considered “an international basketcase,” than it can work anywhere else. The company combines social aspirations with practical business details. Grameen Danone also linked arms with Global Alliance for Improved Nutrition (GAIN) to gain expertise particularly on nutritional value.
CSR is not the Answer
Many corporations and businesses alike today have begun to transform their operations to reflect a socially responsible outlook. However, many have done this simply due to public pressure and very few are actually proactive when it comes to this subject. The underlying reason for this is that these companies are still profit maximizing companies and ultimately they are responsible first to their shareholders. The shareholders demand dividends, and thus any movement to be socially responsible that minimizes profits is not popular. Thus, companies with CSR policies are not an answer as a tool to fixing societies problems. Even though many leaders may be well intentioned, the nature of a corporation is not set-up to be socially driven. Thus, social business provides the correct alternative for today’s socially conscious leaders, investors, consumers, and entrepreneurs.
Significance and Contribution
Mohammad Yunus’ hope in writing this book is to inspire both current and future potential leaders to use their creative capacities in a better way. He is calling for a shift and remodeling of capitalism to include businesses who’s objective is not profit but rather a social benefit. The effective solution to poverty and other global complex problems cannot be left to governments or even non-profits, as they have proved inadequate in the past. Instead, Yunus calls for a new form of organization, the social business, to take charge in the 21st century. Through the creation of Grameen Danone, Mohammad Yunus hopes that other concerned leaders and professionals will look use it as a platform and example to create their own social business in the future.

There is a promise here that human nature will be the guiding force. Investors, managers, owners etc are not just interested in personal gain brought by profits but fundamentally care about the world, and care about one another. Yunus feels that it is time business reflects this multidimensional nature. Social business has the potential to be the most efficient format of expressing this need among us, an ability to make a much more powerful influence and difference in the world than traditional mediums. It will satisfy our human craving for meaning, and this is what will inspire people to invest in similar businesses in the future.

Interesting Ideas and Concepts
The Social Business
“A social business is a company that is cause-driven rather than profit-driven, with the potential to act as a change agent for the world,” (22).
A social business operates in the same way as a profit maximizing business. However, its objective is different. Instead of maximizing profit, the goal is maximizing social benefit. Thus, the business does not pay out dividends to its’ investors, rather any profit that it makes (aims for a modest surplus) is reinvested in the business for even greater social benefit. As Mohammad Yunus puts it, “ the bottom line for the social business is to operate without incurring losses while serving the people and the planet and in particular those among us who are most disadvantaged-in the best possible manner, (24). Social Businesses will compete with both profit maximizing companies and themselves. This will insure even greater efficiency, “bringing the advantage of free-market competition into the world of social improvement,” (27). A social business can also act in a second form. Instead of in the form mentioned above, providing products and services (generally at an affordable price) that provide social benefit, a social business can also be profit maximizing but with the poor/disadvantaged as owners. In this case, profit produced will go directly to benefit the poor in the form of dividends.

The Micro Credit
“Microcredit turns on the economic engines among the rejected population of society. Once a large number of these tiny engines start working, the stage is set for big things,” (56).
Although now around for a couple decades, the idea of the micro credit was what laid the foundation for what Mohammad Yunus believes will be the answer to creating a world without poverty: the social business. Micro credits are loans given out to poor individuals, majority of whom are now women, with the idea of them using these loans to start their own business. Traditional bankers do not give out loans to the poor, as they are not considered credit worthy. A micro credit, however, is given without any collateral; nothing is required but ones humanity. The idea is lending these funds to the poor and putting the power in their hand is the most effective way in pulling them out of poverty. Self-sufficiency here is the key, and this model has been replicated and succeeded all over the world since its institution in 1983 by Mohammad Yunus and the Grameen Bank.
Over have the world is considered poor, and thus is considered unworthy to participate in the financial system. The micro credit system gives poor people a chance, as well as a hope for the rest of the world that poverty will someday be eliminated.

A Poverty Museum
“Once poverty is gone, we’ll need to build museums to display its horrors to future generations. They’ll wonder why poverty continued so long in human society-how a few people could live in luxury while billions dwelt in misery, deprivation, and despair,” (223).
To conclude his book, Mohammad Yunus includes a chapter titled, “Putting Poverty in Museums.” His goal is that through the institution of social business, along with continued collective efforts of governments, NGOs, non-profits, and development organizations worldwide, poverty can and will be eliminated. Following its elimination, its sustained absence can be met by building national poverty museums worldwide. Poverty is a barrier to peace and a human rights violation felt be half of our world’s people, it is more than appropriate that it be looked on after elimination to never happen again.

Conclusion
Grameen Danone is a fine example of “ what can be accomplished when experts from the corporate world turn their attention to solving the social problems facing our poorest citizens,” (132). Although still in its early stages, the work of Grameen Danone thus far has been highly revolutionary and positive, and it will serve as the leader of the new business model for the 21st century and beyond. For as Mohammad Yunus truthfully states, “People want meaning in their lives-the kind of meaning that comes only from knowing that you are doing your part to make our world a better place. Social business provides this meaning,” (162).