Revolutionizing the World Through Social Responsibility
Businesses won’t be able to function effectively and efficiently without the help of the government. People are having a hard time figuring out the role of businesses in line with the aftermaths of different scandals and fiascos in the past. Friedman also wrote in his essay in 1972: “The Social Responsibility of businesses is to generate money. ” After hearing a lot of Corporate Social Responsibility talks, this one line fairly caused a bit of confusion for me. Businesses’ sole purpose and objective is to generate money. It’s implied.
But whenever I hear Social Responsibility, I think of the words “philanthropy” and “non-profit”. But I think what Friedman meant in his essay is that in order for businesses to fully grasp their social responsibility in this economy is to first generate profit because that’s a start. They won’t be able to participate in this whole social responsibility thing if they don’t have impact capital. Businesses are created to do several ranges of things. First is to deliver superior value. They should help in the repair of damaged status quo.
Second is to be mindful of their social impact. Businesses should use themselves to influence and promote social responsibility. Lastly, they should create and uphold new equilibrium. In this age wherein inequality is very rampant, businesses should initiate change and promote equality in their system then to the society. Businesses should create world changing impact. It’s what we need. In order for this to take place, there should be a cross-section collaboration between the government & business and philanthropy & non-profit.
People should stop placing all the work to the private sectors can solve our problems and blaming them if they won’t be able to address the people’s problems. The speaker mentioned something about forces that can drive new movement in the supply chain. First is impact investing wherein capitalists create social benefit and drive economic return. One example is the disruptive model of a business called Zipcar. Zipcar encourages people to share a car, thus, taking cars off the road rather than putting more cars on the road which is better for the renter, sharer and most importantly, to the planet.
Impact investing later on flows to demand. Businesses drive meaning & money and profit & purpose in order for them to generate profit and impact. The government plays a very vital role on the impact economy. It creates rules of the road in which firms can succeed. In which investors and entrepreneurs can thrive. The speaker enumerated four main functions of the government in order for them to participate fully in the impact economy. First, the government encourages standards. These standards help in the facilitation of common metrics.
Global Impact Investing Reporting Standards (GIIRS) is one example. GIIRS evaluate firms’ performances to determine the social good that the business creates. Second, the government helps facilitate access. They help small and large businesses to gain entrance in the economy. Third, the government creates incentives. These incentives are powerful because they encourage people to be part of purpose-driven businesses. Lastly, it erects guardrails to protect the interest of the public. After watching this, it made me aware of the important roles played by businesses and the government.
True enough. Businesses wouldn’t function well without the help of the government and vice versa. Collaboration between them should be fully applied. The government creates conditions in which businesses could succeed. Businesses help balance the economy with its clarification of the market with the mix of incentives. If these two function effectively together, impact economy can change our lives for the better. written by: Pamela Jessica V. Zaragoza Revolutionizing the World Through Social Responsibility – Speaker: Jonathan Greenblatt