Posted by: Nancy | April 23, 2009

Responsibility in business

CSR is the integration of business operations and values, whereby the interests of all stakeholders including investors, customers, employees, the community and the environment are reflected in the companys policies and actions. (from CSRwire.com)
Corporate Social Responsibility is the integration of business operations and values, whereby the interests of all stakeholders including investors, customers, employees, the community and the environment are reflected in the company’s policies and actions. (CSRwire.com)

Earth Day had me thinking about why businesses behave so differently from what we expect of people. And how that’s just not OK anymore.

How often do we see business operating without a sense of responsibility for actions? (AIG? Enron?) Is it because businesses are identified as an “it” rather than a “he” or “she”? It’s not personal, it’s not even a person — it’s something removed from the human individual and, therefore, not expected to behave as a human?

I think the old ways of doing business are changing, swept in on a wave of transparency and accountability. Corporate social responsibility appears to be taking hold for real, a response to the demands of customers, employees and stakeholders.  (Another example of individuals using the collective voice to agitate for change!)

Evidence from Daniel Yankelovich, the masterful public opinion research leader, gave me hope. In an interview with The McKinsey Quarterly, he articulates the case for real change in corporate culture.

Paraphrasing Yankelovich: The question shouldn’t be — Is it legal? The question should be –Is it good for the public?

He makes the case that corporate strategy has to answer two questions:

  • Does it enhance the company’s long-term profitability?
  • Does it serve the public good?

It’s a big change from Milton Friedman’s position that as long as a company is profitable, it is automatically serving the public good. We now expect more. Sure, it’s legal to pay an executive 250 times the wage of the average worker in the company … but is it right?

Yankelovich says the development of trust equity with the public will be a major competitive asset in today’s corporate environment.  He’s right — change will occur only if the public good also serves the bottom line, if there’s a true value to trust equity with the public, consumers, stakeholders.

I’m keeping his questions top of mind with my business and with my work with clients:  will the business strategies enhance profitability, AND, will those strategies serve the public good? The answer to both has to be Yes.

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