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Choose ONE of the three discussion statements and conduct a literature review in response to that statement that critically discusses the academic research in the field. You should draw from case study examples used in lectures or from your own research. Where appropriate, you should also provide definitions.

1.“Encouraging entrepreneurship is bad public policy” (Shane, 2009). Critically discuss this statement by using relevant data that links start-up rates and innovation across three countries, considering the nature of entrepreneurship across a country’s stage of economic development.

2.Critically discuss and compare three approaches to small firm internationalization. Provide an appraisal of each and use relevant case study examples.

3.“Business is a beautiful mechanism to solve (global) problems” (Yunus, 2013). Critically discuss this statement by considering the role of entrepreneurship as a solution to global problems and use relevant case study examples.
 

Global Problems Affecting the Growth of Society

With a long list of threats challenging the stability and long-term habitability of earth, it is very difficult for the businesses to avoid their obligations to contribute to the global issues. In this context, it can be stated that businesses cannot attain success in the world that is already falling. In the today’s globalized environment, there are various global problems which are affecting the growth of society. Some of the major issues are such as poverty, income inequality, education, healthcare, human rights and climate change (Trivedi, 2010). To deal with these global problems, leading international companies are learning that they can diminish the risk by developing different solutions to the great challenges.

In this context, founder of Grameen Bank, Muhammad Yunus stated that “Business is a beautiful mechanism to solve the global problems”. As a micro-finance pioneer, he has made various efforts to deal with the global issues like poverty. By this statement, he wants to state that business operations of a multinational company can assist the country to eliminate the risk of different issues such as poverty, climate change, healthcare, education etc. This paper describes the statement that is given by the founder of Grameen Bank, Muhammad Yunus. The statement is reviewed by the use of literature and different theories. It describes the role of entrepreneurship to resolve the global issues of poverty and sustainability. All the points are discussed by including some case study examples.

According to Muhammad Yunus (2013), business is a very beautiful mechanism to resolve the global issues, but businesses never use it for that objective (Ford, 2013). Entrepreneurs only operate the business to earn money. It just fulfills the self-interest of business and entrepreneurs but not a collective interest of society and global environment. The statement given by the founder of Grameen Bank can be explained with the assistance of opinions of different authors. According to Williams, Daly and Milner (2015), businesses cannot survive in a falling global environment. There are so many issues like poverty and sustainability which have a huge impact on the life of society. Avoiding social and environmental problems is not only bad for the earth and its people, but it can be overwhelming to the economic growth and prosperity of a country (Williams, Dalyand Milner, 2015). In their article, the authors expressed further that the globalized world confronts some most daunting challenges like perpetual conflict, poverty, water scarcity, income inequality, climate change, poverty, lack of health care, unequal educational opportunities and overcrowded urban areas. These are several issues which challenge the long-term stability and habitability of world. These global problems have become more complex with the passage of time (Haugh, and Talwar, 2016). Considering the world’s conditions and their impact on business, business entrepreneurs now understood that it is in their own benefit to become enthusiastic partners in resolving these global problems.

The Beautiful Mechanism of Business to Solve Global Problems

 

Figure 1: Most Important Global Problems

In this context, Korngold (2014) stated in his article that there are various global issues in which businesses can do what the governments cannot. The reason behind this is that international companies have the resources to resolve these issues. In his book, he has mentioned that global firms have vast financial and human capital, international footprint, market power, financial motivation and advanced technology which non-profits and governments do not have. The companies can use these resources to deal with the global issues (Korngold, 2014).

In today’s global environment, one of the major problems is poverty. Entrepreneurship plays an important role in resolving an issue of poverty all over the world. The businesses need to engage in the social entrepreneurship by developing their organization as the social enterprise. According to Cheng (2014), social entrepreneurship is the process to use of start-up firms and other entrepreneurs to create, fund and execute the solutions to different cultural, environmental and cultural issues. Moreover, a social entrepreneur is an idealistic leader who attains systematic, sustainable and long-term social change via innovation (Cheng, 2014). Under their role as a social entrepreneur, the businesses use different strategies and advanced technologies or their combination. Zahra et. al, (2009) described that social entrepreneurs make diverse and significant contributions to the societies and communities by adopting different business models to provide innovative solutions to the persistent and difficult social and global problems. The authors identified three kinds of social entrepreneurs i.e. Social Bricoleur, Social Constructionist and Social Engineer. Social Bricoleurs are the entrepreneurs who generally emphasize on the finding and talking about the small-scale domestic requirements (Zahra, et al, 2015). Social Constructionists exploit the business opportunities and failures in the market by meeting the gaps to the poor customers to launch innovations and reforms to a wide social system. Finally, the third type of social entrepreneur is social engineers who identify global problems in the current social structures and resolve them by announcing a revolutionary change. Due to this, these social entrepreneurs generally damage the outmoded methods and replace them with the new and more appropriate processes (Haugh, and Talwar, 2016). In this way, social entrepreneurs differ in how they find out the social opportunities and find out their impacts on a wider social structure and accumulate resources required to practice these business opportunities. 


Furthermore, McMullen & Bergman (2017)has stated that social entrepreneurship concept has developed a lot during current years.In simple words, social enterprise is a thought of a company which seeks to produce profits and revenues while having a positive effect on the society and its people. There are various social entrepreneurs who have shown their interest towards social activities and they are promoting the social change (McMullen & Bergman, 2017). There are various organizations in the world which worked to overcome the global issue of poverty. Poverty is not just an economic issue but also a social issue. It is about the discrimination, powerlessness, lack of freedom and lack of representation. It refers to the people, who go hungry, lack accommodation, lack education and who cannot visit a doctor when they fall sick (Stevens, Moray &Bruneel, 2015).

Entrepreneurship and Poverty

There are some organizations in Australia like Freedom Cups and WaterSHED. Social initiatives like Grameen Bank that was established by Muhammad Yunus in Bangladesh, have also brought awareness to social enterprises as an innovative economic model. He figured out that lending small firm to poor Bangladeshi villagers can assist lift the entire families out of poverty. According to a report, for over 50 years, the World Bank, aid agencies, donor countries, national governments and civil society firms have competed but they were not able to eliminate the poverty.

 

Figure 2: Global Poverty Rates

According to Prahalad (2009), the businesses can eradicate the poverty by using Bottom of the Pyramid theory. This is a socio-economic concept which enables people to group big segment more than 4 billion of the poorest citizens creating an unserved and invisible market that is blocked by barriers. This is the theory of entrepreneurship that includes partnering with the poor to attain win-win situations where the underprivileged people are involved and at organizations offering products and services to these people are beneficial (Prahalad, 2009). This association between civil society, poor people, governments and large companies can develop the fastest and largest emerging markets all over the world. Large-scale and wide-spread entrepreneurship is at the center of the resolution to the global problem of poverty. Such a theory and approach is available in many examples like private firms, both small and large have successfully built the markets at bottom of the pyramid as a mode of eradicating poverty (McMullen, 2011). In their article, Vickers (2010) described the theory of institutional entrepreneurship that plays an important role to overcome the global problems like poverty. Institutional entrepreneurship occurs when group work to make drastic changes in the organization or society (Vickers, 2010).

By alleviating the poverty, both the world and businesses may have the benefits. Activities of poverty can enhance the performance of a business and build a better world in which it operates its business. Businesses can play an important role to overcome this issue by creating the jobs for poor society, accessing the goods or markets which benefit poor groups in the developing economy markets. It assists the world to create wealthier, healthier and more skilled societies. With the support of these businesses, the communities will offer the suppliers, customers, and employees which organizations require for their sustainable development (Deyand Steyaert, 2016). Through social entrepreneurship; there may be various benefits to poor people. These benefits are:

  • More access to resources
  • Employment
  • Increase in the productivity
  • Education

Types of Social Entrepreneurs

One of the biggest case examples of this entrepreneurship is Avika Group that is founded by an Indian woman rural entrepreneur Malvika Sharma. She established a venture that manufactured hand-embroidered and traditional Indian clothes. Looking at the issue of poverty and inequality, Avika provides employment to more than 700 rural women. To overcome the issue of poverty, Malvika has worked as a social entrepreneur. This social enterprise was established to empower the rural women via their economic growth. Under this, it has provided training and earning opportunities by manufacturing hand-embroidered and traditional garments (Majid, Latif and Koe, 2017). It played a major role to deal with the global problem like poverty and gender inequality. To increase awareness about her social enterprise, Malvika used her business contacts to conduct exhibitions at reputed organizations in the country like Wipro, Infosys, and TCS. Under this, the woman entrepreneur has confronted various challenges in the traditional male-controlled society like India. The case study example of Avika assists in understanding the unavoidable inter-twining of social and business issues in rural perspective. 

Apart from this, another major global problem is sustainability. According to Hörisch (2015), social entrepreneurship plays a vital role in the issue of sustainability. Sustainable entrepreneurship can be described as the creation, detection and utilization of opportunities to develop future products and services which sustain the communal and natural and provide development benefits for others. The larger firms are bringing various transformative and radical sustainability-oriented innovations. Schaltegger(2002) stated that the entrepreneurship that works for sustainability is known as ecopreneurship. It is the most important form of environmental management as the businesses are producing new products, services, and business models which reduce the environmental impacts and enhance the life quality (Schaltegger, 2002). There are various leading businesses which are engaged in the sustainable development goals to emphasize their social, environmental and governance efforts. It assists to make sure that they continue to play a role in creating a resilient world via economic development and opportunity when addressing environmental and social needs.

In this context, Hörisch (2015) stated that for example, sustainability entrepreneurship can put pressure on the big organizations and their R&D divisions by providing the consumers more sustainable products. In today's world, start-ups are creating benchmarks for the competitors and enhancing the sustainability expectations of people. It needs the large organizations to enhance their sustainability performance and effective of sustainability effects to cope with the threats developed by sustainable start-ups (Hörisch, 2015). To deal with the global issue of sustainability, entrepreneurship is sustaining its processes and activities. The entrepreneurs are looking for creative ways to protect the environment or enhance the societal conditions by offering new goods and services. In addition to this, they are using the methods which reduce the harmful business activities while also creating profits for the entrepreneur. By always executing the processes in better and innovative ways, entrepreneurship is very much relevant to the businesses which are interested in sustainability (Kuhlman and Farrington, 2010).

Social Entrepreneurship and Global Poverty

Shepherd and Patzelt (2011) stated that there are various things which need to be sustained in the process of developing sustainability. These points are given below:

  • Sustaining nature
  • Sustaining sources of life assistance
  • Sustaining communities (Shepherd and Patzelt, 2011)

According to Larderel (2009), there are various reasons why the businesses are becoming sustainable towards the environment. Even, businesses shave so many benefits by focusing on sustainability issues. One of the major reasons is that nowadays sound environmental management has become the part of effective management practices of a business. The businesses are using preventive approach by reducing and preventing wastes, discharges, emissions, utilizing less toxic chemicals and enhancing energy efficiency. It is known as eco-efficiency and cleaner production (Larderel, 2009). It is broadly identified as more efficient and cost-effective. The companies have understood that sound environmental management becomes a business advantage in today’s competitive market. The modern population is becoming very concerned towards the environment and natural resources, so a company can enhance its brand image by developing sustainability practices. The companies understand that a negative public image can influence the market share of a company, community relations and investor’s interest towards business (Deakins&Freel, 2009).

The most important reason why the businesses’ role is significant for sustainability management is that business is a major part of this global problem. Now, the business is universally identified as the primary mechanism for economic development and growth required to overcome the poverty. The businesses need to implement more innovations and inventiveness to meet the sustainable development challenges in the future. For instance, in the case of protection of ozone layer, if the businesses had not been able to decrease the consumption, production, and emission of ozone-exhausting substances, the levels of ozone-diminishing substances would have five times more by the year 2050 than today (Corner & Ho, 2010). 


At the beginning of 21stcentury, global firms dominated the global market, with 500 organizations accounting for 70% of an international business. These organizations conduct their business operations in a way that is socially, environmentally and economically sustainable. They are taking risks by putting their suppliers out of their operations and losing the assistance of the community in which they run their business. The role of entrepreneurship can be defined by defining another example of a case study. Navajo Nation, the biggest Native American tribe in the United States developed an entrepreneurial undertaking (Shepherdand Patzelt, 2011). This entrepreneurial venture develops environment-friendly building supplies by recycling the waste materials. In the United States, this firm not only creates the social, economic, cultural and environmental value for Navajo Nation. In addition to this, it also contributes to maintaining the native heritage of Navajo tribe.

Sustainability and Social Entrepreneurship

To support and implement sustainability, businesses may confront some challenges and barriers in this globalized world. Entrepreneurs may find it very difficult to collect the data on sustainability as the meaning of sustainability is different between organizations and sectors. It is very complex for business leaders to create a business case for sustainability as the results are generally intangible and provided for a long duration. In addition to this, the businesses which are engaged to the sustainability feel it very complex to commit its team because of obsolete opinions in global sustainability (Carroll and Buchholtz, 2014). The lack of physical results makes it very difficult to analyze and report on the sustainability initiatives. Moreover, lack of financial capital is one of the major barriers that prevent the entrepreneurs by weakening the ability of entrepreneurs to serve the economy in developing markets. These are the major reasons which lead the entrepreneurs to underestimate the expectations regarding the consumer demand in the developing nations.

These are the barriers on which businesses need to focus and develop strategies so that it can overcome these barriers to sustainability and other global problems. The businesses need to encourage its sustainable actions to alleviate the issues related to protection of the environment and its natural resources (Ngoc &Schbitzer, 2009). 

As mentioned above, modern businesses are making efforts to deal with the global problems like poverty, sustainability, education, lack of effective healthcare etc. The larger business firms have been showing significant efforts to enhance the quality of the environment. However, there are various issues which are still unresolved and they will have a great effect on the earth. However, many efforts have been made to enhance the higher involvement in sustainability practices among businesses; its outcome is still far from satisfactory (Alvarez and Barney, 2014).

Moreover, the businesses need to develop some specific aspects in sustainable entrepreneurship. These aspects are given below:

  • Develop economic gain
  • Develop non-economic gains for the community people
  • Develop social gain for the community
  • Support economic growth of a country

To become more advanced and attentive, the businesses should focus on providing solutions to the global problems. In this process, a single entrepreneur cannot do everything to resolve the issues. It should encourage its workforce towards these global issues. It needs to conduct a training and development program to make the people aware of the global problems like poverty and sustainability. In addition to this, it needs to develop its resources and capabilities towards sustainability. First, the businesses should gather the sufficient data and information on these issues and understand the level of issues (McMullen & Bergman, 2017). After understanding the issues, they should create a sustainable business structure to overcome the issues of sustainability. Adopting a sustainable business system will help the businesses to support the environment, community, and its people. Future sustainable entrepreneurship can include the current body of knowledge by developing an understanding of the entrepreneurial processes for sustaining the globalized communities.

Conclusion

From the above literature review and analysis, it can be stated that social entrepreneurship plays an important role to overcome the global problems like poverty and sustainability. The statement given by Yunus Muhammad i.e. business is a very beautiful mechanism to resolve the global issues is very true as they support the communities and its people. If the companies support the global problems, it will be in the benefits of both the businesses and globalized world. By the development of social entrepreneurship, the businesses can deal with the issues. The businesses can develop the ventures in different roles like Social Bricoleur, Social Constructionist and Social Engineer which can support the globalized world and related issues. The above report includes the role of entrepreneurship in sustainability and poverty issues. There are various companies which are making profits and revenues by engaging in these social activities. From the above analysis, it can be stated that business is a very beautiful mechanism to resolve the global issues if the companies use in the right manner for the benefits of society and global environment. 

References

Alvarez, S.A. and Barney, J.B., 2014.Entrepreneurial opportunities and poverty alleviation. Entrepreneurship Theory and Practice, 38(1), pp.159-184.

Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Cheng, M., 2014, 5 Insights From Social Entrepreneurs On How Business Can Lift People Out Of Poverty, Available from https://www.fastcompany.com/3028067/5-insights-from-social-entrepreneurs-on-how-business-can-lift-people-out-of-poverty. (Accessed on 28 April 2018).

Corner, P.D. & Ho, M., 2010, How opportunities develop in social entrepreneurship", Entrepreneurship Theory and Practice, 34, 4, pp. 635-659.

Deakins, D. &Freel, M.S., 2009, Entrepreneurship and small firms. McGraw-Hill College.

Dey, P., and Steyaert, C., 2016, Rethinking the space of ethics in social entrepreneurship: Power, subjectivity, and practices of freedom. Journal of Business Ethics, 133(4), 627-641.

Ford, L., 2013, Muhammad Yunus: 'Business is a beautiful mechanism to solve problems, Available from https://www.theguardian.com/global-development/2013/may/24/muhammad-yunus-business-solve-problems. (Accessed on 28 April 2018).

Haugh, H.M. and Talwar, A., 2016. Linking social entrepreneurship and social change: The mediating role of empowerment. Journal of Business Ethics, 133(4), pp.643-658.

Hörisch, J., 2015, The Role of Sustainable Entrepreneurship in Sustainability Transitions: A Conceptual Synthesis against the Background of the Multi-Level Perspective, Administrative Sciences, 5, pp. 286-300.

Korngold, A., 2014, Business can do what governments can't: solve the world's biggest problems, Available from https://www.theguardian.com/sustainable-business/business-government-world-problems-davos-multinational. (Accessed on 28 April 2018).

Kuhlman, T. and Farrington, J., 2010. What is sustainability?. Sustainability, 2(11), pp.3436-3448.

Larderel, J.A., 2009, Sustainable Development: The Role Of Business, Public Administration And Public Policy, 2, pp. 1-9.

Majid, I.A., Latif, A. and Koe, W., 2017, SMEs’ Intention towards Sustainable Entrepreneurship, European Journal of Multidisciplinary Studies, 4 (3), pp. 25-32.

McMullen, J. S., & Bergman, B. J., 2017, Social entrepreneurship and the development paradox of prosocial motivation: A cautionary tale. Strategic Entrepreneurship Journal, 11(3), 243-270.

McMullen, J. S., 2011, Delineating the domain of development entrepreneurship: a market?based approach to facilitating inclusive economic growth. Entrepreneurship Theory and Practice, 35(1), 185-193.

Ngoc, U.N. &Schbitzer, H., 2009, Sustainable solutions for solid waste management in Southeast Asian countries, Science Direct Journal.

Prahalad, C. K., 2009, The fortune at the bottom of the pyramid, revised and updated 5th anniversary edition: Eradicating poverty through profits. FT Press.

Schaltegger, S., 2002, A framework for ecopreneurship: Leading bioneers and environmental managers to ecopreneurship. GMI, 38, pp. 45–58.

Shepherd, D.A. and Patzelt, H. 2011, Researching Entrepreneurships’ Role in Sustainable Development, Available from https://link.springer.com/content/pdf/10.1007/978-3-319-48701-4_5.pdf.(Accessed on 28 April 2018).

Stevens, R., Moray, N., &Bruneel, J., 2015, The social and economic mission of social enterprises: Dimensions, measurement, validation, and relation. Entrepreneurship Theory and Practice, 39(5), 1051-1082.

Trivedi, C., 2010, Towards a social ecological framework for social entrepreneurship", Journal of Entrepreneurship, 19, 1, pp. 63-80.

Vickers, L., 2010, Social enterprise and the environment: a review of the literature. Third Sector Research Centre.

Williams, A.D., Daly, J. and Milner, M., 2015, Role of Business in Global Problem Solving, Available from https://gsnetworks.org/wp-content/uploads/Role-of-Business.pdf.(Accessed on 28 April 2018).

Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M., 2009, A typology of social entrepreneurs: Motives, search processes and ethical challenges. Journal of Business Venturing, 24(5), 519-532.

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