social initiatives or engagement

social initiatives or engagement

discussion and response precious

please respond to the following based on initial submission below:

Thank you for your IQ. You have made some good issues in your post, especially as you highlight that “focus of any micro finance should be very balance – making profit as well as responding to societal need for credit in equal measure”. This is very true in that the micro finance structure and recapitailization is a self-regenerated capital structure. There is need that as the micro finance is people-oriented (Khavul, 2010), the business operation should be able to sustain itself and also service other credit needs too through acceptable margin or interest rate.

In your IQ conclusion, you assert that “the only way to succeed is emerging market is to engage the societal issues and not just focus on the profit and the shareholders. Any engagement in social action should not be viewed as a risk but an opportunity to do business”. I quite agree with that, that social actions should be viewed as opportunity to the business even though it is always with a long-term benefits. Most of the businesses that are investing and engaging in social initiatives have doing so in view of long-term returns that the business will stand to gain. That is why good number of businesses have to develop or engage in projects /social initiatives along their operations.

On the other hand I will not totally agree with you that “the only way to succeed in emerging market is to engage in social issues”. In my view, social issues are not the conditions to business success in totality, rather they may contribute in terms of organizational image and brand name / loyalty. Social initiative is not often pursued as competitive advantage but organizations engage and respond based on their degree of appreciation and determination to to contribute to societal wellbeing.

So in my view, social initiatives or engagement can promote business wellbeing but not altogether as a condition as “the only way to succeed” in emerging market. Your views.

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