The role of business in society and corporate meaning
I recently came across an article by Ian Davies of Mc Kinsey & Co, written a year ago. It raises an issue which is bound to become crucial for business leaders in the near future : business's role in society.
There are two extreme ways to look at it : the first is Milton Friedman's phrase, "the business of business is business". The second is the so-called corporate social responsibility (CSR). According to Ian Davies both attitudes fail to match the requirements of the coming business environment because they do not integrate social issues in the core of strategic management. Examples, obesity for food producers or the danger of cigarettes for tobacco companies.
To me, the interesting point in this article is : "there is an implicit contract between big business and society". This is even more relevant than it sounds just because, by definition, all businesses stem from a social question, provided one goes back to the entrepreneur and his or her personnal implication.
What strikes me more and more when working with entrepreneurs, is their relentless will to make an idea become a reality. Apart from a few exceptions, the idea that drives them is nothing else than a contribution to social questions. What I find astonishing, and it is a consequence, is their tendency to consider personal profit as secondary.
It is a myth to believe that entrepreneurs are money-driven ; what drives them is achieving a long-lasting and efficient contribution to social processes.
Ian Davies suggests that CEOs should "articulate publicly the purpose of business in terms less dry than shareholder value". Which is a necessity. The only question is how and where the purpose of their business is to be found ?
There is only one direction to look into : the corporate history. This is where its basic and genuine intention lies, as close as possible to the founder-entrepreneur. The most serious limit to what Ian Davies recommends is to believe that you can decide what the purpose of a business is without going back to why it has come to existence.
There is a lot of evidence based on experience that an increasing concern for the business's role in society will require above all a deep understanding of the corporate goal and meaning as it has developped and not only as one would like to shape it up for the future.
There are two extreme ways to look at it : the first is Milton Friedman's phrase, "the business of business is business". The second is the so-called corporate social responsibility (CSR). According to Ian Davies both attitudes fail to match the requirements of the coming business environment because they do not integrate social issues in the core of strategic management. Examples, obesity for food producers or the danger of cigarettes for tobacco companies.
To me, the interesting point in this article is : "there is an implicit contract between big business and society". This is even more relevant than it sounds just because, by definition, all businesses stem from a social question, provided one goes back to the entrepreneur and his or her personnal implication.
What strikes me more and more when working with entrepreneurs, is their relentless will to make an idea become a reality. Apart from a few exceptions, the idea that drives them is nothing else than a contribution to social questions. What I find astonishing, and it is a consequence, is their tendency to consider personal profit as secondary.
It is a myth to believe that entrepreneurs are money-driven ; what drives them is achieving a long-lasting and efficient contribution to social processes.
Ian Davies suggests that CEOs should "articulate publicly the purpose of business in terms less dry than shareholder value". Which is a necessity. The only question is how and where the purpose of their business is to be found ?
There is only one direction to look into : the corporate history. This is where its basic and genuine intention lies, as close as possible to the founder-entrepreneur. The most serious limit to what Ian Davies recommends is to believe that you can decide what the purpose of a business is without going back to why it has come to existence.
There is a lot of evidence based on experience that an increasing concern for the business's role in society will require above all a deep understanding of the corporate goal and meaning as it has developped and not only as one would like to shape it up for the future.
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