Many companies around the world have great corporate philanthropy and
corporate social responsibility programs. They do a lotta good in the world.
And this kind of makes a mockery out of this dominate model of business as
disconnected from society. Yet some people argue that they're doing
this really just because there's a link to profits.
And the, this so-called business case is what's really driving things.
I'm not sure how much this matters in the real world, as long as people are doing
some good. It might matter to economic theorists but
I'm more concerned about the good that gets done in the real world.
But there is something missing here. Often times these programs are done as
add ons to the business model without having too much overlap.
It's almost as if, if you think capitalism and business are, sort of,
morally questionable, you've got to do something to make up for it.
And oftentimes to do something to make up for the bad is what corporate
philanthropy and corporate social responsibility are aimed at.
Or it seems that way sometimes. So, if we can think about how do we build
these activities in to the very purpose of a business.
We might get a more robust way of understanding business in society.
Of course, peoples hearts are in the right place here.
but sometimes we do have this idea that we're making up for some bad stuff.
One European CEO of a big multinational said to me, look, corporate
responsibility is the most important issue of this century.
The winners are going to be those companies who act responsibly and are
perceived to act responsibly. It's about being responsible and being
perceived to be responsible. But should companies get a pass on the
ill effects of their business, business practices, on the bad effects of some of
their business practices. Because they have a terrific corporate
responsibility program or philanthropy program?
By the way, Lehman Brothers now are bankrupt, with bankruptcy being one of
the causal factors in the global financial crisis, crisis.
Had a great CSR program as well. And these programs do a lot of good.
Goldman Sachs has been one of the most vilified banks in the Global Financial
Crisis. Yet, you might be surprised to learn that
Goldman Sachs has a state of the art corporate philanthropy, culture social
responsibility program and it's had one for some time.
they have a program they call 10,000 wo, 10,000 women.
It's a five year $100 million global initiative to help grow local economies
and bring about more shared prosperity by proving 10,000 underserved women
entrapaneuers. with business and management education
access to mentors' networks helps in starting and getting into businesses.
Now, a program called 10,000 small businesses in a similar way.
And Goldman Sachs gives as a donor advise fund from, which current and former
Goldman Sachs executives can partner and recommend grants.
Their Community Teamworks program is a global volunteer initiative that allows
Goldman Sachs employees to take a day out of the office and volunteer with
not-for-profits. The problem is corporate philanthropy and
corporate social responsibility really don't stray very far from the dominant
story. It's still pretty much shareholders and
owners that really count. Even a recent idea by Harvard Professor
Michael Porter called Shared Value. That does the same thing because Porter
argues that it's not just economic value. It's economic value and social value.
And you have to think about a business as creating both of those kinds of value.
And that's right. However, the very distinction itself
between economic and social commits something I want to call The Separation
Fallacy. The Separation Fallacy says hey, it makes
sense to talk about business on the one hand.
And ethics and values and society on the other.
And I don't really think that does make sense.
I want to give you an example. If I hire you, have I done something with
economic consequences? Hu, I think so.
You have money to pay your bills, et cetera.
But have I done something that has social consequence?
Well, yes, I mean it puts you on a track to move up in the world it may give you
pride and autonomy, a sense of mastery over what you've done.
It can't be measured in purely economic terms.
So I've done something that's social and economical.
If I sell you a computer. Have I done something that's economic?
Well, sure. Maybe you can earn your living with that
comp, computer. But I've done something social as well.
You can connect to other pe, people. You can, figure out how to follow your
your, your favorite teams. there's a lot you can do with that.
And so, divi, dividing it up as, this part's economics, this part's social is
in my view a kind of a fools errand. Business creates value and it creates
value for customers, for suppliers, for employees, for communities and the people
with the money. And thinking about how it creates value
is more interesting than thinking about whether it's, eco, what, what part of
that values economic? What part of that value is social?
The problem with these first two models, of business in society, corporate
philanthropy and corporate social responsibility could be illustrated by
the following conversation. [INAUDIBLE] .
Someone says to me. Well, I know your business, really,
produces great products and services. People want those products and services.
your employees really like working there. It's, you treat them with dignity and
respect and, and they're great jobs. Suppliers like to do business with you
because you make them better. They make you better.
You're a good citizen in the community. And there are lots of ways to do that.
But you figured out your way. And you're making money hand over fist.
What I want to know is, are you socially responsible?
If you're doing all that stuff right, it's hard to understand what social
responsibility adds here. Now, corporate philanthropy and corporate
social responsibility are two ways of connecting business in society.
There's a lot of good that's done with both of those, and I don't think it goes
far enough. What I'd like you to think about in the
discussion forums is what are some companies you consider socially
responsible. Why do you think you're socially
responsible? What's the underlying business model and
how's that connected to social responsibility?