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Policies to Deal with Natural Disasters
in View of a
Social Business Partnership Model

The Australasian Journal of Disaster
and Trauma Studies
ISSN:  1174-4707
Volume : 2009-1

Policies to Deal with Natural Disasters
in View of a Social Business Partnership Model

Md. Abdur Raquib*, Faculty of Business and Law,Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia, Phone: +606 252 3440, Fax: +606 231 8869, E-mail: mabdur.raquib@mmu.edu.my
Md. Wahid Murad, Department of Economics Faculty of Management and Economics, University of Malaysia Terengganu (UMT), 21030 Kuala Terengganu, Malaysia Tel: +609-668 4152 Fax: +609-668 4237 E-mail: mwmurad@gmail.com
R. N. Anantharaman, Faculty of Business and Law, Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia, Phone: +606 252 3877, Fax: +606 231 8869, E-mail: r.n.anantharaman@mmu.edu.my
Uchenna Cyril Eze, Faculty of Business and Law, Multimedia University, Jalan Ayer Keroh Lama, 75450 Melaka, Malaysia, Phone: +606 252 3615, Fax: +606 231 8869, E-mail: uchenna.eze@mmu.edu.my

* Corresponding author.

Keywords: Natural disasters, preparedness and resiliency, social capital, social creativity, social business partnership model.

Md. Abdur Raquib

Faculty of Business and Law
Multimedia University
Jalan Ayer Keroh Lama,
75450 Melaka,

Md. Wahid Murad

Department of Economics Faculty of Management and Economics
University of Malaysia Terengganu (UMT)
21030 Kuala Terengganu,

R. N. Anantharaman

Faculty of Business and Law
Multimedia University
Jalan Ayer Keroh Lama,
75450 Melaka

Uchenna Cyril Eze

Faculty of Business and Law
Multimedia University
Jalan Ayer Keroh Lama,
75450 Melaka


This paper encompasses and systematically analyses available literatures on disaster resiliency, and poverty alleviation issues and proposes a Social Business Partnership Model based on the concept of social creativity, social capital and principles of reciprocity of social exchange theory. Disaster or emergency management research holds a transparent gap in addressing emerging “social business” issue, which is immensely important for both the poverty-stricken developing countries and wealthy nations. Although much have been said about disaster resiliency and further international aid efforts could somewhat have healed the immediate effects of natural disasters, but such efforts tantamount to temporary resilience – not a permanent one due to pressing concerns of poverty. Proposed social business partnership model will benefit richer countries to enhance their wealth by effectively contributing to economies and sustainable activities of developing countries, instead of their one-way attachment with disaster aid operations. At the same time, vast population of poverty-shattered developing nations will be able to create social capital that would enable them to achieve a long-term disaster resiliency and social sustainability.

Policies to Deal with Natural Disasters
in View of a Social Business Partnership Model


Current era is widely thought to have been the time of extensive natural disasters as the globe has already watched mass devastation by natural power, catastrophic human calamities, wreckage and losses of properties. No one feels relief while someone watches human screaming for help or human acts of carrying decomposed remains. While in the past, efforts were delayed by the severity of devastations, landfalls, surge of waters, quake aftershock, and the consequences of aftermaths such as reverse weather conditions, lawlessness, governments’ and the UN’s appeals to the nations for help etc. Signs and symbols revealed from the fact-finding news of aftermaths have established a crucial reality that this globe in this era of globalization is not adequately prepared for facing such natural disasters and the conditions have elevated the likelihood of heightened severity of losses of human being and properties. Comfort et al (2005) argue, “Coordination within and between organizations in disaster environments presents a continuing challenge in disaster management. Standard administrative practices have proven ineffective in achieving adequate coordination in the dynamic environments of disaster operations”.

Economic inequality between wealthy and developing nations should not be cited as a problem, rather an area of plentiful opportunities of humanistic demands that could be meted out by bilateral and multilateral cooperation and business partnerships. Covington J. and Simpson D. M. (2006) state, “The economic inequality between industrialized and developing countries has proven to be one method of demonstrating the effects of poverty on disaster impact”. By quoting Corotis and Enarson, the authors further state, “according to a statement by the relief organization Tearfund, ‘ninety-eight percent of those killed and affected by natural disasters come from developing countries, underlining the link between poverty and vulnerability” (Covington J. and Simpson D. M., 2006) . According to Schipper M. and Pelling M. (2006), “The United Nations (UN) Millennium Declaration, adopted in 2000, notes the importance of reducing ‘the number and effects of natural and man-made disasters”. Some of the developing nations always face chronic natural disaster vulnerability, such as China, Indonesia, and Bangladesh etc. Most of the disaster-prone developing countries are trapped in a malicious circle of extreme poverty. While resources are not adequate to feed the population of teeming millions, these countries are far backward to engage their resources to make a standard disaster preparedness plan. As a result, they largely depend upon the United Nations and wealthy nations when they come across significant natural disasters.

In this paper we have systematically reviewed the available literature on the disaster and resilience issues concurrent with some important aspects of poverty, social capital and social creativity to justify an imminent necessity of our social business partnership model that may enduringly create benefits for both developing and developed nations. In addition, some empirical evidences on the success of social-business models have been discussed to back up our proposed “social-business partnership model”. As long as the mass people of the poor countries live below the poverty level, natural disaster resilience would remain an unmanageable and worthless strategy for them. People need to be enabled, productive and empowered from the conditions of inability, unproductiveness and disempowered in order to be freed from chronic poverty and starvations.

Literature Review

Disaster and Preparedness

According to Haque, E., 2000, “The Emergency Measures Act (1997) of Manitoba defines emergencies as ‘a present or imminent situation or condition that requires prompt action to prevent or limit the loss of life; harm or damage to the safety, health or welfare of people; or damage to property or the environment”. He further writes, “the act also applies to a disaster, which is defined as ‘a calamity which has resulted or may result in the loss of life or serious harm or damage to the safety, health or welfare of people; or widespread damage to property or the environment’. “Empirical evidence suggests that prior beliefs, past experiences, emergency management, planning and training, all influence the subsequent evaluation of, and preparation for, environmental hazards” (Haque, E., 2000). Hazards may be natural in origin, but it is the way in which societies have developed that causes them to become disasters (Maskrey, 1993; Hewitt, 1996; Bhatt, 2002; Wisner et al., 2003; O’Brien, et. al., 2006). Guion, Scammon and Borders, (2007) write, “the four-phase model of disaster management (Mileti, 1999) – mitigation, preparedness, response and recovery – defines the base language that planners, responders and responsible authorities use when discussing and planning for the inevitable occurrence of disasters”. The authors further describe: “mitigation involves long-range activities, initiated well in advance of a specific disaster or in response to a known risk during the preparedness phase, emergency management focuses on reducing the negative consequences of disasters during the response phase emergency management agencies undertake immediate, local efforts to provide short-term disaster relief, to facilitate the rescue of victims, and to provide shelter in the recovery phase, public organizations take on the task of restoring social systems and rebuilding social environment” (Guion, Scammon and Borders, (2007).

According to World Bank good practice notes (2008) on Disaster Risk Reduction (DRR), “An effective disaster management system covers the following five aspects: (i) Risk Identification; (ii) Emergency preparedness; (iii) Institutional Capacity Building; (iv) Risk Mitigation; and (v) Catastrophe Risk Financing”. Covington J. and Simpson D. M. (2006) write, “Disaster preparedness practitioners, whether in government organizations or private businesses, will seek out multiple models and tailor one to their specific needs. The phenomena tend to create rifts in the disaster preparedness profession, as no single theory or set of theories, can be identified as the core concepts upon which disaster preparedness plan and practices are based”.

In our view, disaster preparedness can be defined as all humanly possible efforts with scientific tools, training, equipment and manpower with regard to the nature, severity, intensity and frequency of natural disasters that could be undertaken before any such disaster hits a country or any of its regions. Such preparedness is ardently needed not for combating the disaster, as total solution is not humanly possible, but for reducing the swelling exposure and sternness of losses in terms of both human casualties and property destructions. “Unpredictability is a defining characteristic of disasters; if we could predict every aspect in advance and devise contingencies, the event would not be a disaster” (Quarantelli 1998, Perry 2004). When we could predict a hurricane or flood disaster by the use of scientific early warning system, we cannot deliberately tell what is going to happen, how many people will die or what damages would likely occur unless we practically see the consequences of disasters. Brainstorming on unimaginable predictability can be a useful tool to shape an overreaching preparedness and a condition of ‘over-prepared’ may best serve an enviable preparedness. Paton and Raftery (1998) write, “Such was the case in Papua New Guinea when a tsunami struck its eastern seaboard. The lack of warning and the speed with which this event occurred would have negated or significantly reduced any preparations that had been in place. The tsunami struck an indigenous population ill-prepared and ill-resources to respond”.

Long Term Disaster Management and Rehabilitation

Usually a natural disaster draws global attention while it happens; however, when the aid ceases to exist or emergency workers leave the scene, sufferings of the victims may remain unattended. Looming concerns of economic, social, psychological, and cultural effects grasp the aggrieved victims resulting in survival vulnerability. Disaster’s long-term impacts on most of the developing countries are seemingly difficult to overcome as these countries virtually have no strong preparedness and rehabilitation measures available due to resource lacking and shortages of educated and skilled manpower. As a result, they fail to structure a sound and effective disaster management and enforcement system. Mass people are unaware of the ways and means to take appropriate disaster management preparations resulting in significant death, human casualties and destruction of properties. Most people of the poor countries fall into the risks of disaster vulnerability and they are indeed helpless. Historically social research concentrated heavily on individual and organizational developments by providing outstanding thoughts, knowledge-based models and tools with fewer than expected emphasis on developments on inter-community alignments. A broad consensus is needed to boost community alignments by empowering communities to deal with disaster preparedness so that people irrespective of developing and developed nations feel secure from disaster vulnerabilities.

Our social business-partnership model is theoretical, ideological, and visionary and subject to significant scrutiny which would lead to further controversy and enormous scope for future research. It encompasses the need for inter-community alignments based on social investments. Social business model is nothing new although the idea came through recent development of research in other perspectives. We also view that the theories developed in social science research for organizational developments may well be used in inter-community alignment perspectives, which could be easier than past centuries due to technological breakthroughs. Developed countries may initiate that role of leadership aligning the developing nations with a view to empowering citizens so that they could be able to get rid of disaster catastrophes and vulnerabilities and at the same time, the economic return on social investments may come into realities.

First, we concentrate on Social Exchange Theory of Reciprocity. According to Zeidan, S (2006), “Based on social exchange theory (Blau, 1964) and the norm of reciprocity (Gouldner, 1960), Eisenberger, Fasolo, and Davis-La Mastro (1990) suggested employees develop sense of obligation to respond favorably (e.g., performing well, remaining with the organization, etc.) to favorable treatment from their employer. Blau (1964) believed that the establishments of social exchange relationship is based on the situation that when one party contributes, the corresponding beneficial party responds (feedback) with reciprocity. This model is premised upon the belief that the social context of organization, including relationships based on mutual trust and attraction, entails unspecified obligations (Blau, 1964; Gouldner, 1960; Wat, D. & Shaffer, M. A., 2005). According to social exchange theory, when employees feel satisfied with their jobs, employees will display citizenship behaviors to reciprocate the support provided by the organization or supervisors (Bateman and Organ 1983; Chen, C. C. and Chiu, Su-Fen, 2008). Let us use the concept for an undernourished and poorer community, which has been suffering from illiteracy, unemployment, hunger and unawareness of risks associated with disaster vulnerabilities. In fact, if economic investment is made to empower them to eradicate these barriers considerably, they could certainly be productive and involved in economic activities and would try their best to reciprocate return to the investor. According to UNDP human development report 2007/2008, “the institutional separation model that characterizes the relief and development sectors has largely failed in the past, bringing to the forefront the twin concepts of risks and vulnerability, and the inextricable links between natural disasters and human development” (Seck P., UNDP HDR 2007/2008).

Disaster Vulnerability, Resilience and Humanitarian Assistance

A large body of social science literature exists on how large-scale disasters affect the behavioral response of victims impacted by the disaster event, as well as those who are physically outside of those communities, including the impact of community preparation for and response to extreme events on overall resilience (Tierney et al., 2001; Rodriguez, H., Nigg, J., and Wachtendorf, T., 2005). The concept of “vulnerability” is of prominent importance in disaster resilience. “Physical vulnerability results from location with respect to potential hazards, poor or inadequate construction of buildings, age of structures, and so forth” (Levine, J. N., Esnard, A. M., and Sapat, A., 2007). The authors further write, “Social vulnerability involves the relative ability of an individual, household, or community capacity to respond appropriately to threatening conditions. Lack of income, lack of transport, age, gender, minority status, lack of information, and numerous other factors may contribute to social vulnerability” (Levine, J. N., Esnard, A. M., and Sapat, A., 2007).

The American Heritage Dictionary (2000) defines resilience “as the ability to recover quickly from illness, change or misfortune; buoyancy” (Hoge, et al, 2007). “When extreme events surpass the damage threshold they result in catastrophic losses of both human lives and valuable resources. Such events are rare, but they raise new issues and questions with respect to human coping ability, prevention and mitigation of similar future events” (Haque, E., 2000). The term “resilience” has been used to describe “the positive pole of individual differences in people’s response to stress and adversity” (Rutter, 1987; Hoge, et al, 2007). Alternative terms have been used such as “protective factors,” invulnerability” or “hardiness” (Hoge, et al, 2007). Resilience should be systematically built into the planning and design processes rather than added on as an aftermath (Bosher L. et al, 2007). Emergency management must be placed in a holistic setting and new initiatives should be taken to ensure that emergency management duties are seen as a shared responsibility that not only mitigates potential hazards, but also embraces the sustainability agenda (Trim 2004; Bosher L. et al, 2007).

“Ensuring a smooth transition from response to full recovery reconstruction largely depends upon the coordinated efforts of local, state, and federal agencies and between government and the private sector. There are very examples of situations in which a lack of coordination has compounded the impacts of a natural disaster via creation of a man-made institutional disaster” (Peacock et al. 2000; Kapucu 2005; Levine, J. N., et al. 2007). According to World Bank good practice notes (2008) on Disaster Risk Reduction (DRR), “A primary aim of recovery management is to use the opportunity to build or strengthen resilience in society, its citizens, its buildings, its critical facilities, its livelihoods, its government administration, and its natural environments. To establish an effective disaster risk reduction framework, key institutional actors and stakeholders will need to work together and be aware of their respective roles and responsibilities”. Multidisciplinary integration appears to be the “holy grail” necessary to maximize the knowledge and skills required to achieve a resilient and sustainable built environment (Bosher L. et al, 2007). Incompetent “resilience” may be the best reason why mass people suffer from disaster vulnerabilities especially in poverty-stricken countries or regions (detail in next section). Such inept resilience can be solved by embedding the core concept of “social creativity”. Fischer, G. et al, (2002) state, “Technology alone, however, is not the complete answer to social creativity. Social Capital that characterizes the features of a social group—such as networks, norms, and trust, which all facilitate coordination and cooperation for mutual benefit—is of crucial importance to foster social creativity”.

Much has been talked about disaster resilience, but ironically, the objectives of such social concept are now by far from crucial reality for the vulnerable citizens who live in poverty-stricken areas. According to Haque, E., (2000), “Many factors can be associated with the failure of disaster and emergency preparedness; these may include cognitive dissonance (Festinger, 1957; Irish and Falconer 1979); poor effects and results in public education (El Sabh and Cote, 1998); personality conflict in the local administration (Simpson-Housley and Bradshaw, 1978); and the lack of finance, capital equipment, and human resources (Haque, 1997)” (Haque, 2000). While disaster management has evolved from a relief and response approach to a risk management approach with a greater focus on reducing vulnerabilities and increasing coping capacities), initiatives aimed at mitigation and prevention are still few and poorly financed (O’Brien et al., 2006). Although many emergency events are not entirely unexpected and can therefore be mitigated, emergency management does not currently pay a significantly proactive role (Bosher L. et al, 2007). The role of humanitarian assistance during and post-disaster vulnerabilities gets crucial attention in the literature. The activities of the humanitarian sector are guided by recognized standards, such as the Humanitarian Charter and Minimum Standards in Disaster Response (Sphere Project 2005; O’Brien et al., 2006). This externally guided approach, although focused on needs and rights, does raise concerns about appropriateness, as the humanitarian system is ‘largely ignorant of the views of the affected people as to the assistance being provided’ (Hofmann et al., 2004, p-32; O’Brien et al., 2006).

Poverty Shattered Developing and/or Low Income Countries

“There is a large and growing subset of low-income countries, which are labeled ‘difficult partners’ or ‘countries under stresses’. Donors believe that these countries, despite substantial increases in aid flows, are unable to put aid to good use, owing to their weak institutional and policy performance base and their chronic vulnerability to unrest, conflict and state failure” (Rogerson, A., Hewitt, A., and Waldenberg, D. 2004). We perceive within such a gloomy scenario, ‘free humanitarian aid’ attracts the attention of some influential quarters and/or political lobbies in these nations that diminish the sense of accountability resulting in improper distribution of the aided funds and essentials among the distressed. So the objective of humanitarian perspective is utterly unfulfilled. Business partnerships with the wealthy nations could establish a strong sense of accountability among the aid recipient countries. Underdeveloped countries have been suffering from multiplicity of problems. These are economic, social, physical and infrastructural. Human capital is largely unutilized due to poverty that gripped masses of the people with incapacities and inabilities. Lack of education and resources are the primary impediments to the concept of creativity and entrepreneurships. Governments are unable to support them to the extent of their pressing demands. “Racial and ethnic minorities, people with low income and those with little education tend to have higher perceptions of personal risks from natural hazards, in part because of their lack of resources and their vulnerable positions in society” (Schmidlin, 2006; Guion, Scammon and Borders, 2007). A post-disaster condition relates them to “learned helplessness”. The theory of “learned helplessness” is a condition as Abramson et al (1978) and Hoge et al (2007) defined in which people who consider themselves as powerless become more passive and restricted in their coping abilities. So the objective of disaster resilience is practically unaccomplished.

According to O’Brien et al, (2006) “the world’s poorer nations are disproportionately affected and the most vulnerable and marginalized people in these nations bear the brunt. The data show that economic losses have risen sevenfold since the 1960s with reported losses of USD 659.9 billion in the 1990s. Two-thirds of these economic losses were reported were accrued by more developed countries (MDCs)”. The authors further note that deaths are concentrated in less developed countries (LDCs). The International Federation of Red Cross and Red Crescent Societies (IFRC) reports that between 1992 and 2001, 27,464 and 594,899 fatalities occurred in MDCs and LDCs respectively (IFRC, 2002; O’Brien et al, 2006). A major unresolved issue is how best to support poor countries below minimum performance thresholds, especially failing states (Rogerson, A., Hewitt, A., and Waldenberg, D. 2004). Besides, Ghalib, A. K., and Hossain, F. (2008) state “The World Bank (Deepa et al., 1999) consulted inhabitants in developing nations on a global scale and compiled a comprehensive report, which concluded that majority of the world’s problems stem from poverty and destitution. It attributed desperation, crime, corruption, violence, powerlessness, weakness and insecurity to one root cause: poverty”. The authors further state, “This is because poverty itself leads to a widening social and economic gap between rich and poor people. Such disparities lead to inequalities, which augment and aggravate the situation even further; thereby leading to a cycle that feeds upon itself and exacerbates the situation to inconceivable magnitudes”(Deepa et al., 1999; Ghalib, A. K., and Hossain, F., 2008). We perceive social inequalities can substantially be narrowed down by incorporating pragmatic resilience measures not merely by theoretical or conceptual hammering on the post-natural-disaster conditions and short-term aid planning, but by effective steps of enabling poor people in gaining economic and social power. Let’s change people who are living with “less than a dollar a day” into people who could be able to “invest at least ten dollars a day”.

While discussing on the topic “Poverty, Inequality, and Social Welfare”, Todaro, M. P. and Smith, S. C. (2003) provided an equation:

W = W(Y, I, P)

The authors state, “we will write welfare, W, as where Y as income per capita and enters our welfare function positively, I is the inequality and enters negatively, and P is absolute poverty and also enters negatively. The authors further state, “these three components have distinct significance, and we need to consider all three elements to achieve an overall assessment of welfare in developing countries” (Todaro, M. P. and Smith, S. C., 2003). From the viewpoint of conjoined effect of “natural disaster and absolute poverty” we wish to extend this equation by including two additional variables as SBP = social business partnership and DR = disaster resilience. The modified equation would therefore, be:

W = W(Y, SBP, DR, I, P)

The reason of the above extension is that SBP and DR will be positive input like Y keeping two others (I and P) negative meaning that greater efforts of welfare can be possible on long term basis that may ensure social sustainability in the developing countries to a considerable extent.

UNDP’s Human Poverty Index for developing countries (HPI-1) 2008 has calculated country-specific poverty scores based on three dimensions: “(i) a long healthy life (probability at birth of not surviving to age 40); (ii) knowledge (adult literacy rates); and (iii) a decent standard of living (this reflected from the deprivation in a decent standard of living which was indicated from the percentage of population not using an improved water source and the percentage of children under weight-for-age)”. Governments of the poor countries are neither able to energize and enable their starving population consistently due to their weak economic resources nor are they able to ensure efficient utilization of humanitarian aids due to weak institutional infrastructure and corrupt practices. From the humanitarian points of view, wealthy countries tend to provide humanitarian aids under their international policy programs without setting apparent directions as to how the aids should reach the distressed people or how the authorities of developing nations are obligated for the aid distribution. However, it is unfortunate that most affected people were deprived of getting the aid in reality due to lack of logistics and corruption turning the humanitarian issues into intolerable range of vulnerabilities. Transparency International described “research on the problem of corruption in humanitarian assistance, carried out in 2007 and 2008 by the Feinstein International Center (FIC) of Tufts University in collaboration with the Humanitarian Policy Group (HPG) at the Overseas Development Institute (ODI) in London and the sponsoring organization, Transparency International (TI)” (Transparency International 2007/2008). This research finds “a positive correlation between the frequency and severity of crises on the one hand and the corruption on the other”. This research further suggests, “the bottom line is that humanitarian crises are intensely complex and political environments where rapidly changing resource levels, survival instincts, fear and opportunity come together to create scenarios rife with the opportunity for corruption (Transparency International 2007/2008). After having discussed corruption scenarios, TI report (2007/2008) writes, “these stories highlight the fundamental dilemma of the power relationships inherent in humanitarian aid: outsiders with power and resources on one side and victims/beneficiaries with needs but little power on the other, an environment many would see as conducive to corruption”.

However, the above picture sounds discouraging to both the wealthy and poor countries as the objective of humanitarian aid to heal the psychological, physical and social pains and anguishes of the victims and to build a social resilience virtually got unaccomplished. To meet the objective of humanitarian aid, we believe that our social business partnership model will not only establish significant accountability for the aid recipient countries as they will be obligated to pay to the donors later but also build a solid resilience as the countries will be bound to set up transparent and accountable aid distribution system. Poverty, corruption, inadequate governance, “chronic vulnerability to unrest, conflict and state failure” (Rogerson, A., Hewitt, A., and Waldenberg, D. 2004) coupled with economic inabilities, resource lacking and human inabilities/incapacities cannot be solved without intervention with pragmatic and sustainable plans. As long as these will remain in the developing countries, disaster-resilience plan would not be attained by extending humanitarian operations during and aftermath of natural disasters. Therefore, human development through “social partnerships” by using the concept of social capital, social creativity and social entrepreneurships seems to have been a strongest way to achieve effective resilience, disaster mitigation and sustainable developments. .

Social Partnerships in Literature

A key goal in disaster management is the protection of people and the enhancement of their quality of life while remaining prepared for the ongoing possibility and aftermath of disaster (Guion, Scammon and Borders, 2007). Capacity-building comes down to resources and commitments to ensure that these resources are effectively utilized. This is a formidable challenge (O’Brien et al., 2006). Findings in the childhood resiliency research, multiple studies of adult trauma have found that perceived social support and family cohesion are associated with greater resilience (Perry et al, 1992; King et al, 1998; Koenen et al, 2003; Hoge et al, 2007). Economic deprivation and governance failure in some poor countries lead to potential lack of social support and further corruption on aid distribution distort the goal of resilience. The increase in the occurrence of disaster is impacting disproportionately on the poor (Wisner, et al., 2004; O’Brien, et al., 2006). Disasters are both sociological and political events, and though hurricanes and earthquakes are acts of nature, the disasters resulting from these events are social in origin (Tierney, 1999; Lindell, and Perry, 2001; Guion, Scammon and Borders, 2007). Partnerships and social coalitions are based upon principles of community and individual ‘self reliance’ and mutual obligations (Stone, W. & Hughes, J. 2000). In effect, social capital is looked to as enabling of an environment based in partnerships in which government acts as facilitator (Stone, W. & Hughes, J. 2000)

A focus upon partnership promises for business a genuine place within the government – business – community coalition. This context has seen the re-emergence of business as social contributor, involving an identity shift from marketer to corporate citizen (Stone, W. & Hughes, J. 2000). According to Haque, E., (2000), societal experience often leads to better preparedness in anticipating natural disaster. To better understand the level of coping ability and to determine the areas where improvement could be made one needs to look to past experiences, past coping strategies, the type of emergency responses and the role of involved agencies, problems encountered, and post-event modification of emergency plans at the community level (Haque, E., 2000). “A new approach to partnership, built around longer-term development visions, established in a democratic, consultative way by recipient countries, and with the support but not the direction of major donors. The literature on development partnerships has a long history, centered on Sweden and UNDP, as well as the DAC and the EU’s partnership agreements; this originated long before the Bretton Woods institutions espoused such approaches” (Rogerson, A., Hewitt, A., and Waldenberg, D. 2004). The authors further write, “In recent years this strand has become more central. The Comprehensive Development Framework (Wolfensohn, 1999) emphasized the multi-sector, multidisciplinary, long-term development vision approach, as well as country leadership in designing the ‘architecture’ of local donor co-operation. (Rogerson, A., Hewitt, A., and Waldenberg, D. 2004)

According to UNICEF (online), “Since 1997 UNICEF offices working in former communist countries have accumulated a body of evidence suggesting that the provision of social protection services to the most vulnerable population groups may be greatly improved by the introduction of social business initiatives”. Social businesses are the commercial enterprises that employ disadvantaged people – in the case of YAPS, homeless, disabled and migrant populations, and redistribute earnings toward business growth for further employment creation, and for a range of other social and charitable aim (UNICEF – online). The website further says, YAPS social businesses promote the novel concept of using the efficiency and in-built sustainability of free markets to generate social wealth. According to online information of a conference and research workshop titled: Social Partnership: A New Kind of Governance? (Online): “Partnership institutions are said to embody new principles of democratic deliberation, where relations between the key political actors should be analyzed in terms of mutual learning rather than strict political exchange (O’Donnell, 2000). Such relations of deliberation, learning and institutional experimentation are said to be central to the local area-based partnerships and to be particularly well suited to a Post-Fordist economy (Sabel, 1996)”.

Social Capital – Basis of our Proposed Social Business Partnership Model

Our social business partnership model is based on the concept of social capital, foundation of which is social creativity. The concept of social capital provides an anchor to analyze the non-technical and non-managerial aspects of social creativity. Social capital creates the resources upon which a person can draw to obtain knowledge, cooperation and help from others. (Fischer, G. et al., 2002). Social capital can be understood quite simply as networks of social relations characterized by norms of trust and reciprocity (Stone, W. & Hughes, J. 2000). The essence of social capital is quality social relations (Stone, W. & Hughes, J. 2000). It is the quality of relationships, understood through the use of the concept ‘social capital’ which affects the capacity of people to come together to collectively resolve problems they face in common (Stewart-Weeks and Richardson 1998; Stone, W. & Hughes, J. 2000) and achieve outcomes of mutual benefits (Lochner et al. 1999; Stone, W. & Hughes, J. 2000). To a large extent the new relationship between government, business community and family life is in line with Third Way politics (Giddens 1998; Stone, W. & Hughes, J. 2000). This “Third Way” abandons old style left-right divides, emphasizing instead a model of social democracy in which community is central (Stone, W. & Hughes, J. 2000). The motivation for a new style of governance stems largely from a need to redress the perceived imbalance between government, market and community (Stone, W. & Hughes, J. 2000).

Social Business Models: Evidence of Success

Mair, J., and Schoen, O. (2005) presented “a comparative case analysis of three social entrepreneurial organizations, based in Bangladesh, Egypt and Spain, whose success has been widely recognized. Analysis of these organizations’ business models reveals common patterns: in their use of strategic resources, in their value networks, and in their customer interface” (Mair, J., and Schoen, O., 2005). The authors (Mair, J., and Schoen, O., 2005) further dictate, “The findings suggest that successful social entrepreneurial organizations proactively create their own value network of companies that share their social vision; develop resource strategies as an integral part of the business model; and integrate the target group into the social value network”. As a first of their case studies, and as we view that is crucially important to support our proposed SBP model, the authors (Mair, J., and Schoen, O., 2005) presented the success story of Grameen bank (GB) of Bangladesh. As of 2004 GB’s micro-credit operation has made a cumulative loan disbursement of $4.2 billion through 1200 branches in Bangladesh. Today GB has 3.5 million borrowers, 95% of whom are women. The repayment rate is around a stunning 98% (Yunus 2004, Mair, J., and Schoen, O., 2005). In 2004, GB started with an interest-free loan program for beggars, so-called “struggling members” which soon reached 7000 beggars (Kamluddin, 2004; Mair, J., and Schoen, O., 2005). The bank itself has created employment for over 12,000 staff. In 1994, according to GB, the bank contributed 1.5% to the GDP of Bangladesh, a figure comparable with that of Wal-Mart in the US (Mainsah et al. 2004, Mair, J., and Schoen, O., 2005).

The authors illustrate an Egyptian success story in their second case study on an organization called “Sekem”. Sekem’s declared mission is to “meet the challenges of the time by contributing towards the all encompassing development of man, community and the earth (Merckens, 2000; Mair, J., and Schoen, O., 2005). Today, some 2000 people work for Sekem. In 2003, the Sekem group reported revenues of 73 million Egyptian pounds (1€ ~ 7EP) (The Schwab Foundation, 2003; Mair, J., and Schoen, O., 2005).

In their third case of study, the authors (Mair, J., and Schoen, O., 2005) described a legendary success story of a social business model adopted by Mondragón Corporación Cooperativa (MCC) of Spain. The authors state the mission of this corporation as, “combining basic business objectives with the use of democratic organizational methods, job creation, personal and professional development of workers, and a commitment to the improvement of the society in which it operates”. According to authors, today, MCC is the seventh largest business group in Spain by revenues. Out of three groups of this corporation, In 2003, the industrial group had total sales of €4,379 million and the distribution group, €5,276 million. MCC has a global presence, with 38 production plants worldwide. With a total of 68,260 jobs, the group ranked third among employers in Spain in 2002 (MCC 2003; Mair, J., and Schoen, O., 2005)

Proposed Model of Social Business Partnership

In this paper, we have developed a "social business partnership" model with the view to focus on humanitarian and social needs arising out of disaster propensities. In our view, there may have been somewhat misunderstandings about “capitalism” and “democracy” in some peoples’ mindset that it creates social imbalance as the capitalism gives some groups or people to be overwhelmingly powerful by economic means. In reality, they failed to understand that the progress of groups and individuals had intensified the accumulations of huge capitals that expanded corporations for social benefits, accelerated industrializations, endless technological innovations, powerful leaderships and enormous employment opportunities coupled with the human and social progressions that today’s world is actively using the benefits. Social benefits can not be ensured by restraining free speech and human rights. By establishing cross-border social-business partnership models (SBPMs), both wealthy and developing nations may exchange their business interests and reap up the benefits of the new dimension of capitalism.

We strongly believe that rich countries should extend their courteous assistance to the developing nations more on disaster preparedness rather than “on-call” assistance aftermaths. To make enduring friendships, rich countries should also be explicitly responsive to the aid needs of the developing countries in the aftermaths of disasters in order to serve an endurable “social business ties”. There is a vast “natural disaster preparedness markets” in the developing countries in the context of “social business” paradigm. Affluent nations can sell their expertise, training and equipment on easy and longer terms to these nations to make them prepared for disasters. Preparations can protect the civilians from massive casualties and prevent the properties from mass destructions. “Cost of preparedness” is exorbitantly lower than the “Cost of mass casualties and destructions”. The later demands plentiful resources to heal up human pains and restore the normal conditions back on track. Wealthy nations may alter their policies into a “social business partnership” paradigm that can benefit large number of developing nations in facing the challenges of natural disasters. Low-cost product innovations and segmentations under “social business” plans would follow particular norms to match with the payment ability of these nations. For example: low-cost and easy-flying helicopters and ambulances; low-cost tents, blood bags and dry foods; low-cost and easy moving lifting equipment; low cost emergency medical supplies; low-cost disaster training; low-cost and effective information and communication technology (ICT); low-cost constructions of bridges, culverts, dams, houses and emergency shelters; low-cost and efficient early-warning systems; disaster-friendly low-cost tourism system; and; low-cost disaster management systems or packages etc.

Developing countries may raise their ability to pay for the services, training and equipment provided by the richer nations by way of introducing a low-rate disaster tax structure. For example, luxurious commodities such as, luxury cars, jewellery, luxury furniture that may be taxed high enough in the proposed income tax system. Bridging with the developed nations under the “social business partnership” platform may create a sustainable learning and growth environment for the developing nations and they would also be able to gain their own capabilities on disaster preparedness in the long run. Since the rich nations have extraordinarily better preparedness as compared to developing world, there is always an opportunity to make social business partnerships in the “preparedness market” making both richer and poorer as beneficiaries. This concept may save billions of dollars unproductive aids which may be donated one time with no sign of good transparency in the distribution systems in most of the affected nations. “Donors believe that these countries, despite substantial increases in aid flows, are unable to put aid to good use, owing to their weak institutional and policy performance base and their chronic vulnerability to unrest, conflict and state failure” (Rogerson, A., Hewitt, A., and Waldenberg, D. 2004). Severe lack of disaster preparedness in developing nations seems a sign of the demand for products and services and therefore, the rich nations may set up social business partnerships. Disaster “aftermath-aids” only make the poor nations being dependant on aid and “aid dependability” does not create a self-concisions psychology to make them well prepared for the natural disasters. As a result, productivity suffers and poor countries always look for foreign aids at the time and aftermaths of disasters. Furthermore, when aids discontinue or rescuers depart from the disaster-hit country, disaster sufferings escalate and the matters of permanent rehabilitation processes remain unresolved. This condition may be transformed through the creation of social business partnerships (SBP) in which rich and poor countries will have their stated and bonded accountability to perform business functions.

Figure 1: SBP Model – Disaster Resiliency and Poverty Alleviation

However, considering the intensity, frequency and severity of global natural disasters, massive devastations and significant human and property losses, we have emphasized two-fold needs in this article. Firstly, commencing social-business partnerships between wealthy and developing nations in disaster preparedness. This will have three major impacts: (i) developing nations will be empowered in disaster preparedness; (ii) wealthy nations will reap the profit opportunities by using “disaster-preparedness markets” and also stand firm for looking into specific aid needs at the crises situations; and (iii) developing countries will gain their own capabilities in the longer run which does not mean their necessities to get assistance from the wealthy nations will be dried out. Secondly, intensely connecting disaster preparedness and resiliency approaches with poverty and mass undernourishment issues in order to build sustainable and quality human-lifestyles. This will significantly ensure “resiliency” approach of disaster management in the indigent developing nations and, in turn, will shrink remarkably, the potential loss of human lives and properties.

Policy Recommendations

We recommend our proposed Social Business Partnership Model, which is to spotlight all the nations of the world, particularly the nations that are usually poor (LDCs) and further being affected much by frequent natural disasters. Any strategy of disaster resilience, avoiding poverty issues would not work at all, not even with free humanitarian aids, unless efforts are being made for the longer terms to eradicate the inhuman conditionality in those poor and marginalized areas. People are needy and their needs are mountain-high that indicates economic demands for goods and services. They need to fulfill their psychological, social and economic needs for which they would work tirelessly, should they be given opportunities. Bangladesh’s Grameen Bank’s (GB) example made this perspective inherently clear. Astounding rate of loan recovery from the poor women (98%) once who held nothing became socially enriching and economically sound. This example indicates poverty itself is not to be blamed; rather unsupportive environment and lack of opportunities had long suppressed the human potential that virtually attributed to multiplicity of socio-economic problems, such as, voicelessness, learned-helplessness, social stress, burnout, lack of human productivity-education-innovativeness, social conflicts, unrest and political corruption. True capitalism ensures human democracy and social rights that people can express their voices and freedoms. Hence community-based social-capitalism is important. It gives the investors’ rights to earn profit and free decisive power from the created social opportunities and the participants, who work in a unified community and can be able to build self-sufficiency through the process of “enabling and empowerment”. This way appropriate disaster resilience objective can be materialized. From the sense of principles of reciprocity, people feel accountability to ensure return on investors’ worth. Therefore, our proposed Social Business Partnership Model can ensure peoples’ participation and resolve their socio-economic problems by making them able to create profitable opportunities and enjoy independence, social maturity and persistent disaster-resilience.

A social business partnership for dealing with natural disaster could be made between and among the countries whose goal is not to maximize profits unilaterally while profit itself is an important factor but to serve the interests of the society or nation as a top priority without sustaining losses. Focus should be on normative or welfare approach that would make inter-community alignments on social benefits, meetings their unfulfilled human needs by enabling and empowering communities in social business functions. This way, neglected poor will get array of opportunities to change their quality of life-styles. The following are our recommendations, which may possess a risk of potential controversy or further debate, but they will contribute to the way of forming a new global order in which both the rich and poor will benefit from a common goal – that is helping each other to meet their mutual socio-economic interests and developments. Every decision of the following investments on the poor and marginalized people would bring abundant opportunities of social welfare and earning profits that would lead to strengthen the economic power of both the wealthy and developing nations:

  1. Complex design problems require more knowledge than any single person can possess, and the knowledge relevant to a problem is often distributed among all stakeholders who have different perspectives and background knowledge, thus providing the foundation for social creativity (Fischer, G. et al, 2002). Investments for poverty eradication and building sustainable disaster resilience need uninterrupted coordination among social action groups or corporations. According to Donaldson, L. P. (2004), “ Group cohesiveness is critical for the sustainability of social action groups to subsequent issue campaigns beyond the initial issue of focus”. The author further suggests, sharing and affirming this shared experience enhances group cohesiveness and brings about the empowering feeling of universality”. We recommend the social investment groups to build an endurable inter-connectedness or network no matter they get involved in different activities. For example two corporations work in a marginalized and poor community; one is engaged in security and safety management while the other is engaged in promoting education among the poor. They must keep unbroken connections along with other groups to deal with issues that the community holds common interests.
  2. Beside the government-to-government, international aid agencies and humanitarian organizations, private corporations may also invest their wealth in profit making opportunities within the poor societies while the marginalized people would get access to resources, education, health-care and socio-economic opportunities to succeed.
  3. Investors must open workable offices in marginalized areas to participate directly in social investments ensuring strong community participation. Host-country government must ensure appropriate security measures in accordance with investors’ priorities.
  4. Educated and talented people from host-country could be hired to make cultural adjustments and information-sharing to mutually draw-out strategic options to maximize social benefits and improve profitability from social investments. Host-country government representatives must monitor the compliance with the priorities of the investors.
  5. First step of social investment should focus on infrastructural developments by engaging marginalized people to contribute their labor and human efforts. In this stage, building educational institutions, libraries, hospitals and health centers, shopping centers, agricultural and vocational training centers, low-cost residential housing, road links, parks, recreation centers and emergency shelters should be established. When these become operational, they must pay nominal service charges from their income while they receive services showing reciprocal commitment and loyalty to their investors. These infrastructures would further create opportunities for their employments provided they complete certain educational requirements.
  6. Second step in the process would make a mandatory provision for all men and women to receive education within their own cultural, ethnic, social and religious identities. At the same time, they will be given access to resources so that they can take part in economic and business opportunities and make profits. Easy long-term repayment schedules would enable them to pay back their loans to the investors and would further enrich their creditworthiness in order to gain wider access to credits and resources.
  7. Third step is to equip marginalized population with technological health-care skills and agricultural and vocational training. Investors will create small-scale agricultural, handicrafts and vocational projects in which people will be employed and they would be able to invest their earned income to get partial ownerships.
  8. Fourth step would create small-scale industries in which marginalized people will be employed to run the industries. They will be given option to invest their earned income to avail partial ownerships. Besides locally manufactured consumer products can also be exported to other countries where comparative cost advantages exist.
  9. In the fifth step, investors may establish vocational and community colleges and in the longer run, universities in marginalized community. Grown-up children of marginalized people would be able to study by paying fees. On-campus employments and scholarships may also be offered to students. Fostering education with multifaceted social supports will accelerate enduring opportunities of businesses and the people will be gaining ground in building self-sufficiency and longer-term disaster resiliency.
  10. Continuous research is another defining characteristic how social-business partnership models will succeed on the ground. As this emerging area is evolving slowly, past success stories would serve as moral tonics to deal with it while at the same time, continuous risk analysis must go on to respond appropriately so that the goal of social developments would not be impaired or tarnished.


As the civilizations have now been experiencing a significant-change-era, citizens of the developing nations need to assess their experience on disaster preparedness to view what lapses were there, what impeded their missions and what new experience they gained on the ground. The goals should be to trim down human sufferings from catastrophes, enhance exposures to protect and prevent casualties and to heal their pains and anguishes by way of building and nurturing a permanent preparedness standard. Beside the prudent and capable policies of the developed nations, low-income developing nations also possess an immense accountability to share international efforts to clean up the atmosphere. Rich nations can effectively provide sustainable assistance to the developing nations both in commodities and services in establishing appropriate disaster preparedness and response plans through the creation of social business partnerships. This effort may likely reduce their unexpected burdens of significant aid commitments and disbursements when the unprepared or ill-prepared developing countries experience fierce natural calamities, massive destructions and mass-casualties.

When a frail levee, dam or embankment is being forced by squally winds generated by oceanic hurricanes leading to irreparable wreckage, devastation of the localities, demise of the scores of people and destruction of the precious properties -- shouldn’t it be better to replace such fragile protection by a stronger one? It may take couple of million or billion dollars, however, would likely save invaluable human lives and properties to the tune of trillions. Preparedness must follow real cost-benefit analysis (CBA) like this. Little extra costs may have been better than losing billions of dollars worth. Further, disaster resilience for largely deprived and marginalized poor civilities cannot be possible without social intervention for the eradication of poverty. Able can help unable, rich can help poor, empowered can help powerless and these are all consistent with social exchange theory of social research. Rich countries have largely been successful in implementing these ideas over long periods that led them to enrich their economic wealth and social and environmental developments. They need to come forward to apply these ideas in poor and marginalized civilizations where people had long been suffering in largely unsupportive conditionality. Empowering these people will make enormous business opportunities that can help both the rich and poor nations to be bonded in one goal – serving this planet with successes and achievements.

Finally, we perceive that any potential failure of our proposed Social Business Partnership Model will be one of the main barriers to its future developments. However, we also understand that any social businesses might have a very low risk threshold and, because failure is not an option, then anything that might fail is unlikely to be considered. If social businesses have a history of accumulating charity funding then the transition to running a business will certainly involve a much higher degree of risk. In fact, many factors can cause conventional business failure within the private sector and these are equally as valid in the social businesses. Therefore, any future studies aiming at reducing the risks involving social businesses will obviously have merit, but the risks could not be avoided altogether. Pecukonis and Wenocur (1994) agree that “agents of social change need to be dedicated to engendering perceptions of “self-efficacy” and hopefulness as part of their organizing process” (Donaldson, L. P., 2004). We thus recommend that future studies should constantly review and reassess how social businesses were developing and sustaining.


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Md. Abdur Raquib, Md. Wahid Murad, R. N. Anantharaman & Uchenna Cyril Eze © 2009. The authors assign to the Australasian Journal of Disaster and Trauma Studies at Massey University a non-exclusive licence to use this document for personal use and in courses of instruction provided that the article is used in full and this copyright statement is reproduced. The authors also grant a non-exclusive licence to Massey University to publish this document in full on the World Wide Web and for the document to be published on mirrors on the World Wide Web. Any other usage is prohibited without the express permission of the authors.

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