I remember with fondness a dear
friend who often said “what goes around comes around”, usually in response to
something smart that I’d said to him, and his words always provoked a laugh
because I knew he’d eventually exact revenge.
I think his words aptly address the nature of our actions: when we do that which is good, it comes back
to us and usually in greater volume than the original act, and unfortunately
the reverse is also true.
Many public organizations, including
the United Nations, describe social responsibility as the “Triple Bottom Line”
of people, planet and profits. In other
words, businesses take responsibility for the impact that their actions or
products exact on the environment (planet) or their community of stakeholders
(people) while maintaining their ability to be a sustainable organization
(profitable). Social responsibility is
always tied to ethics, or how a business operates with regard to the
prescriptive of law and in the absence of it (e.g. when social values are at
issue). I believe there is a perfect
correlation between socially responsible companies and economically viable
Milton Friedman wrote in 1970
that “there is one and only one social responsibility of business – to use its
resources and engage in activities designed to increase its profits…” Although
I admire and respect Friedman’s work, this was a point with which I simply
could not agree. So, I conducted my own poll on Facebook, and was not surprised
that 100% of the respondents disagreed with Friedman. I do not have their reasons for disagreement,
but I can give you mine. Consider the
view of Peter Drucker, who argued that businesses do not exist to maximize
profits but to minimize costs, “costs of doing business and costs of staying in
business; costs of labor and raw materials, and costs of capital; costs of
today’s jobs and costs of tomorrow’s job and tomorrow’s pensions”. Just as surely as we invest in raw materials
and pay wages to create products, we also invest in our people and their
well-being and by extension we invest in the sustainability of our communities.
This is just good business. I like the
way that the founder and CEO of Whole Foods, John Mackey, expressed this
thought when he said “It is the function of company leadership to develop
solutions that continually work for the common good.”
Advancing social responsibility
can change the world. The Micro Credit Program of The
International Alliance for Women (TIAW) has
followed the Grameen Foundation idealogy by funding Village Banks all over the
world. The women who have received micro
loans through these banks have a reported 98% repayment rate. Their economic
empowerment is contributing to economic expansion in their villages. Women who learn and earn are less likely to
live in poverty.
There are very clear benefits of
social responsibility to the business.
For one, it is differentiating and can even result in preference by
customers given equal prices or products from competitors. For another, it leads to an internal good
will among employees that frequently ripples externally as these employees
model similar behavior. It also builds a
culture that is justifiably proud and recognized as doing the right thing.
Leaders, your path is clear. Do that which is in the common good, and it
will come back to you.
Lisa Kaiser Hickey