Do you know what a social business is? Do you know what the ethical justifications are for social business? These are some of questions that are answered in this Massive Open Online Course (MOOC). The topics will include:

• Defining social business
• Microfinancing and ethical issues
• How social businesses fail

The speaker for this MOOC is Roland Fox, a finance lecturer at Salford Business School. Roland Fox has had his work published in books including “International Financial Management“. Roland draws on has practical experience gained during his time at PriceWaterhouseCoopers and previous teaching experience at De Montfort University and Leeds Metropolitan University.

We discuss the implications that being a social business has on society. We will look at the challenges that social businesses face with emphasis on microfinancing and ethical issues. To help explain the background thinking behind these practical problem the concept of blended value proposition will be used to understand social business more generally.

Defining social business

In this video we will learn the key terms such as blended value proposition and balance score card as well as examples of social businesses.

Microfinancing and Social Businesses – Introduction – MOOC [1 / 4]

Reflection

• What is a social business?
• Name one example of a social business?
• What is the concept of a blended value proposition?

Microfinancing and ethical issues

What are the ethical issues facing social businesses?

Social Business explained by the Centre for Social Impact

There are a range of ethical issues related to social business and microfinance. To highlight the ethical issues facing social businesses we look at the role of microfinancing in developing countries.

For example, companies in India are letting poor people borrow money. However, they are then forced to repay the money on very short terms and receive little or no support for making these repayments. The stress and pressure it places upon people is revealed by an alleged number of suicides that can be linked to these money borrowing activities.

Reflection

• Can social business be an ethical alternative to “loan sharks”?
• Based on the video from the Centre for Social Impact how can a social business based approach improve the situation in developing economies?

Microfinancing and Social Businesses – Microfinance – MOOC [2 / 4]

Reflection

• Consider how social businesses are conducted in Russia and other emerging economies.

How social businesses fail

Microfinancing and Social Businesses – Managing a Social Businesses – MOOC [3 / 4]

There are many examples of social businesses that have become very successful. But how and why do social businesses fail? When a social business does something that affects its finances is it necessarily considered a failure? Mistakes in a competitive market can cause issues with public trust in an organisation.

However, social businesses exist to help people and this relationship between a company’s bottom line and a commitment to an ethical position may not always be completely compatible. Start-up social businesses almost always compete with established businesses so despite a commitment to people there is always financial competition.

Often this balance between people and money prevents start-up social businesses from progressing financially.

Reflection

• How do social businesses fail?
• How can a social business remain competitive in an already competitive market?
• What examples are there of social businesses that are successful?
• What examples are there of social businesses that take a clear ethical position?

Negative aspects of social businesses

Are social businesses always good?

China is a fast growing market, but what drives this growth? A more surprising example is Comic Relief – a major charity based in the UK – which promotes a vision of a just world free from poverty.

But recently Comic Relief has received more negative press attention.

Microfinancing and Social Businesses – Negative Aspects of Social Businesses – MOOC [4 / 4]

Reflection

• What are some of the negatives to being a social business?

We hope you all enjoyed our MOOC on microfinancing and social business. Feel free to like, share and tweet this MOOC. If you have any more thoughts about what you have just seen and read, please comment below.

This material was created by Vlad Jiman, Jonathan Bedard, Dionisios Paranichianakis and Jaina Chothani. We are currently in our final year of study at Salford Business School. 

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