Corporate Governance & Ethics: Grameen Bank as a Socially Responsible Business

Running head: CORPORATE GOVERNANCE & ETHICS
Question and Answer
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1CORPORATE GOVERNANCE & ETHICS
Part A Question 1:
The term social responsibility of a business denotes the ethical behaviour and
consideration of the institution and the stakeholders and contribution to the society and its
economic and environmental issues (Cheng, Ioannou & Serafeim, 2014). A Social
Responsible Business is for-profit business venture and has two objectives: first, to gain
financial profits and second, to improve the base of the society by creating optimist changes
to the community. The most important aspect of this kind of business is that it makes an
attempt to improve various vicinities of the society including the cultural, economical and
environmental sides. There is similarity in between the Social Responsible Business and
Corporate Social Responsibility as intention of both the ventures is to make certain positive
changes in the society by widening the community-based involvement (Tai & Chuang, 2014).
However, the main aim of the Social Responsible Business is to create market space by
forming partnership with local community or with non-governmental organisations.
One of the most suitable examples of Social Responsible Business is Grameen bank
that has been originated in Bangladesh and founded by the Nobel laureate Mohammed Yunus
(Schrempf-Stirling, Palazzo, & Phillips, 2016). The bank has played an important role in the
micro credit system of Bangladesh and helped to recover the turbulent financial crisis.
According to Mohammed Yunus, every company is required to be measured on the basis of
triple bottom line (financial, social and environmental). Grameen bank has provided money
to the poor villagers so that they can start new business and transform their livelihood and can
avoid the curse of poverty ("Grameen Bank | Bank for the Poor", 2018). Therefore, it can be
observed that the objective of Grameen bank is similar to the Social Responsible Business as
the bank wants to expand their business by changing the lives of the poor villagers and
abolish the curse of poverty (Hopkins, 2016).

2CORPORATE GOVERNANCE & ETHICS
Part A Question 2
The term Grameen Bank has derived its origin from the concept of village and works as a
community development bank in Bangladesh. It provides micro credits to the poor villagers
of Bangladesh and encourages the people to start up new businesses so that they can avoid
the curse of poverty (Roodman, & Morduch, 2014).
The bank was founded by Mohammad Yunus in 1976. Considering the objective of
the bank, it can be stated that it is a good example of Social Responsible Business. The bank
has made an involvement with the local community, provided loan to the poor to set up their
business, motivates them to reduce the curse of poverty and expand their business by backing
up the financial structure of Bangladesh. The bank has launched the idea of micro credit
system to the poor people for the first time in Bangladesh and won World Habitat Award for
its low cost housing program. The bank has taken many initiatives to gear up the commerce
and agriculture of Bangladesh and help the poor villagers to earn money and pay off the debt.
The bank believed that the endless potentiality of the people can promote financial
independence and to cherish the fact, it provides small loan to them. This helps the bank to
earn profit by improving the social, cultural and economical standard of Bangladesh (Crane,
& Matten, 2016).
Part A Question 3
Ethics is a part of philosophy that resolves a dispute in between the good and bad on
the base of morality (Tasnim, 2014). Ethics can be divided into three parts such as meta-
ethics that deals with the theoretical approach to moral proposition; normative ethics that
deals with moral course of action and applied ethics that deals with the situation-base actions.

3CORPORATE GOVERNANCE & ETHICS
However, certain situations can be cropped up where problem arises between possible moral
imperatives and probability of situational conflicts can be raised. Literally, ethical dilemma
points out the situation where there are more than one ethical solution and it becomes tough
to choose any one of the existing options. Considering the nature of ethical dilemma, it can be
stated that it forms a part of situational ethics.
Ethical dilemma can be cropped up at any time. The principle of this dilemma can
better be understood by way of certain examples. Suppose, in a runaway, a train is running
and all of a sudden a man come in between the lines. There are two options available for the
driver, either to save the man by stopping the train or let the man be killed. Therefore, an
ethical dilemma cropped up in this situation. If the driver wants to save the man, he has to
stop the train immediately and there is a possibility that the train can be derailed by such
sudden break and that may cause life threat to many passengers. This is a hypothetical
instance of situational conflict.
Topic A Question 4
Mohammad Yunus is not only the founder of Grameen Bank, but he is considered as
the father of micro finance too. The financial concept of Grameen Bank has been praised by
many countries and Economists (Novitaningrum, & Amboningtyas, 2017). He is able to
change the concept of human potentiality by improving their standard and provided small
loan to them. However, the bank is facing certain ethical dilemma now regarding the interest
rate riddle (Islam, Sathye & Hu, 2015). The Prime Minister of Bangladesh has commented
that the loan concept of the bank is sucking the blood of thee poor villagers. The aid funding
system of the bank has been challenged for the first time in a documentary telecasted by the
Norwegian television where it was alleged that the rate of interest of the bank is being used in
different purpose and that does not support the poverty alleviation of professor Mohammad