Grameen Danone Foods: A Social Business Enterprise

            
 
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Case Details:

Case Code : BECG073
Case Length : 15 Pages
Period : 2005-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Grameen Danone Foods
Industry : FMCG
Countries : Bangladesh

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"The new wave in business is - forget corporate social responsibility and philanthropy - how do you integrate this into your core business...The idea Danone has of creating a social dividend for shareholders - that's cutting-edge. No one else has come up with this interesting a model. It supports your brand, returns your capital, you're not going to lose money, and you give your shareholders a vision of doing something good."1

- Marc Van Ameringen, Executive Director, Global Alliance for Improved Nutrition2, in 2007.

"This represents a unique initiative in creating a social business enterprise, i.e. an enterprise created not to maximize profit, but created with a declared mission to maximize benefits to the people served, without incurring losses. It is a small project to begin with, but contains the seed of a new breed of business, which can change the economic world fundamentally."3

- Dr. Muhammad Yunus in 2006.

Introduction

In March 2006, Groupe Danone (Danone), a French food giant, and the Grameen Group4, a Bangladesh-based group, came together to form a joint venture, Grameen Danone Foods Social Business Enterprise (GDF). As the name indicated, the joint venture was to be a social business enterprise (SBE) - an enterprise whose primary objective was to maximize the benefits to society rather than to maximize profits. The SBE concept was put forth by Nobel award winner Dr. Muhammed Yunus (Dr. Yunus), founder of Grameen Bank (Refer Exhibit I for a brief note on SBEs).

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies

Danone, one of the largest food conglomerates in the world with around US$ 13 billion in sales, unveiled the Danone Way in 2001.

This was an organization-wide program that aimed to integrate business with sustainability.

The Grameen Bank, itself an SBE, was considered a pioneer in micro-credit and offered small loans to the poor who used the money to create small businesses. Its ultimate objective was to remove poverty from Bangladesh.

In an era when most organizations operated with the sole motive of profit maximization, Danone's initiative to start a business in a Least Developed Country (LDC)5 to benefit the poorest of the poor was seen as unusual.

Grameen Danone Foods: A Social Business Enterprise - Next Page>>

1] "Danone Meets Muhammad Yunus,"www.developmentcrossing.com, January 30, 2007.

2] Global Alliance for Improved Nutrition (GAIN) was created at a special UN session in 2002. Its mission is to reduce malnutrition through the use of food fortification and other strategies aimed at improving the health and nutrition of populations at risk. (Source: www.gainhealth.org)

3] "Launching of Grameen Danone Social Business Enterprise,"www.danone.com, March 16, 2006.

4] The Grameen Group includes Grameen Bank, Grameen Telecom, Grameen Shakti, Grameen Byabosha Bikas, and Grameen Kalyan.

5] According to the United Nations (UN), LDCs are those countries with a three-year average per capita Gross National Income of less than US$ 750, have the lowest levels of socioeconomic development, and are economically vulnerable. Some other LDCs are Niger, Nepal, and Bhutan.

 

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