Q: Should organizations use their profits for socially responsible causes?
A: Your inquiry is aimed at the heart of understanding — and potentially upending — the ultimate purpose of business itself. First, consider what do you think is the purpose of business?
Generally, there are two mind-sets regarding the purpose of business: 1) to make a profit, and 2) to profit and help society as an organizational citizen. Many business leaders, corporate boards and company shareholders will posit that businesses exist solely to make money. Of course, businesses must make money to sustain and advance their operations, including ensuring employees receive fair compensation; investing in innovative development and competitive growth strategies; and providing legal, financial benefits to stakeholders.
The profit-plus-organizational citizen mind-set advocates that businesses exist for the dual purpose of making a profit and improving humanity through socially responsible acts. Social responsibility suggests organizations have an obligation to act for the benefit of society at large. Socially responsible companies, such as B corporations, work to maintain a balance between economic and societal ecosystems. Envision a two-dimensional ring with business on the left of the ring and consumers connected on the right: Consumers help businesses remain strong, and businesses help the community remain vibrant as well.
Whenever I see “A Christmas Carol,” I am humbled by the following dialogue between Jacob Marley’s ghost and Ebenezer Scrooge: “But you were always a good man of business, Jacob,” faltered Scrooge, who now began to apply this to himself. “Business!” cried the Ghost, wringing its hands again. “Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were, all, my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!”
Social responsibility is not an original idea, and it certainly has never been an obligatory notion. However, promoting the common good — in whatever manner a business sees fit — is not only an ethical choice, it is a purposeful choice.
Nicole Zwieg Daly is the director of Center for Ethics in Practice at the University of St. Thomas Opus College of Business.