Profit Vs. Social Business

5746 Words23 Pages
May 4, 2012 Social Business vs. Profit-Making Business The fragile status of this world and its people has made it increasingly evident that there is a necessity for the reformation of our currently established, profit-based business model. It is has become impossible to depend and secure for the well-being of our future generations without doing so. The more-conscious model of social business must be adapted to ensure the sustainable development of humanity since it is superior to the solely profit-seeking model in meeting the needs and eradicating the problems of the modern world. The most basic difference between social business and for-profit organizations is their reason for existence. For-profit companies are primarily established to generate income for their employees, as well as for general financial stability. On the other hand, social businesses aim to serve a greater humanitarian and environmental need in their existence. Social businesses reserve their income for “programs and services aimed at meeting people’s unmet or under-met needs, such as food, water, shelter and education, or towards other issues such as deforestation and endangered species.” (Ingram). Conversely, for-profit industries focus on the needs of the marketplace, offering whatever may be needed to create a lucrative profit and “choosing to distribute profits between owners, employees, shareholders and the business itself.” (Ingram). The idea of social business has become an increasingly sustainable and profitable model in today’s economy. In his book, Creating a World without Poverty: Social Business and the Future of Capitalism, Muhammad Yunus discusses two types of social business. The first focuses on businesses dealing with social objectives only, and second type is any money-making business that is owned or managed by the disadvantaged people. The social idea is
Open Document