Summary of Social Entrepreneurship

ECONOMIC PRINCIPLE: All Choices have an Opportunity Cost, and People respond to incentives in predictable ways

THESIS (CONNECT ECONOMIC PRINCIPLE WITH YOUR ANSWER TO YOUR RESEARCH QUESTION):

When starting a social entrepreneurship, it is questionable whether or not it can profitable and truly address the root of the social problem. Entrepreneurs may be lessening their own profit, by helping those who need it; however, social entrepreneurships may become more successful than if the business was not supporting the cause because consumers are drawn to their cause.

SYNTHESIS PARAGRAPH:

Starting a social entrepreneurship can be risky, due to its potentially lower profits and external/internal problems with those the entrepreneurship works with. For example, Muhammad Yunus founded Grameen Bank which he discusses in Banker to the Poor. It gives small loans primarily to Bangladeshi women. He and his team encountered countless problems, such as cultural resistance to women working, retaining female workers, and geographical complications. He brainstormed what the root of these problems were, and the things he observed resulted him in creating a mandatory women’s support group. Also, in structuring his bank, he decided to “do the exactly the opposite of traditional banks.” Traditional banks often have a system of large loans over a long period of time, but Yunus decided to institute a daily payment program with loans so small it would be very unlikely to miss. Clearly, Yunus’s model for his social entrepreneurship has worked as he has developed over 2,000 locations. In an interview with Harvard Business Review, Sally Osberg, president and CEO of Skoll Foundation, also addresses  the necessary factors in achieving a successful business.She says “Economics matter...It’s much more about how those resources are leveraged to affect change.” She believes that entrepreneurs often try to create an impact far beyond the scale of their organization. Knowing what your available resources are and  what to do with them maximizes your scale of impact. In an Al Jazeera Article, Professor Moseley discusses the limits of social entrepreneurship. Mosley asserts that social change is much harder than starting a business. Engaging with these poor people directly through their language and education will be the ultimate escape from poverty. To summarize, social entrepreneurships have the potential to succeed, however, engaging with its recipients in meaningful ways and remodeling the ideas behind the entrepreneurship are imperative.