What’s the true purpose behind venturing into a business? Is it your ambition? Or just way to earn and build up status? If you are on a verge of setting up a startup or you wish to become an entrepreneur for any reason, it is very important to remember that your organization's purpose must be aligned with the world’s view and society’s expectations.
Understanding the new view
Businesses are not working in the traditional way. In fact, they are not expected to work so! Milton Friedman, an American Economist once said, “There is one and only social responsibility of business, to use its resources and engage its resources and activities to increase its profits as long as it stays within the rules of game, which is to say, engages in open and free competition without deception or fraud.”
Most of the businesses till now were operating just for profits, it is not the same now! There is a whole new shift in what the world is expecting from businesses or companies. There is a complete new view that is emerging on what businesses should be. There are so many terms buzzing around organizations like Corporate Social Responsibility, Social Impact, Social Entrepreneurship, Sustainable Business, and Conscious Capitalism. Something that seemed very interesting to me is ESG Criteria which are the set of standards used to evaluate a business not only on financial performance but also on environmental performance, social concern and governance. With all these latest concepts, businesses are realizing that making profit is not enough. The big idea to pursue larger social purpose is budding across the world of business.
A Glance on Organizational Purpose
Every business has its own reason for existence, the most important purpose being the positive difference it wants to cater to the world through products & services that not only bring a change in the society but also fill the company with commitment and determination.
Finding the exact purpose is not an easy job, so it is better to cultivate a purpose for the business.
The ample amount for research in understanding the society's expectations and coming out with an objective that clearly contributes to the world while giving way to earn profit is necessary to cultivate purpose.
Why Should Businesses Pursue Social and Environmental Purpose?
Though people incorporate amazing strategies to promote products and attract clients in order to make spellbinding business, they hardly understand the importance to follow up strategies to create social impact. A business might be instantiated with various goals and missions, but the end of the day it is all about gaining trust. Considering the present scenario, a business gaining excellence or falling flat depends on the impact it throws on society.
1. One of the factors that are driving this change in the corporate world is the declining trust and confidence on the government. After a detailed survey in almost 28 countries across the world, Eldman trust reports that governments are less trusted than NGOs and businesses. The government proclaims to have insufficient resources to fulfill social needs and also maintain the environmental sustainability. The world is in need of capital to solve the toughest problems, it is an absolute necessity for the private sector to contribute for solving the issues.
2. Most of the companies are not considering environmental and social issues as an immediate danger. They are not aware of the risks that the future may offer to their own business. Paul Polman, CEO Unilever says, "It is not possible to have a strong functioning business in a world of increasing inequality, poverty, and climate change"
3. The major disconnect between doing good and doing good business is prevailing everywhere. The key factor that would drive business is likely to be the steps you take to do good to the society and environment.
How will Social Concern Benefit Business?
The concern need not be specific to poverty, pollution or sustainability, it can be anything!
1. Your concern towards employees will definitely serve the purpose of making a positive change in the society and also will tremendously influence the business growth by making the workers feel valued, stay motivated and cling on to the company for a longer time.
2. Investments for social cause would bring in innovations in cost-saving, it will also provide various ideas to gain profit while solving major problems in and around.
3. It allows exploring the thoughts of society and provides opportunities to move into new markets and gain new customers.
To conclude the major issues currently faced in the society are lack of environmental sustainability, unequal opportunities in terms of education, jobs, resources access and many more. It‘s a sad thing to know the privation of basic needs among people especially Indians. Though businesses are coming forward to address the issues, the impact caused till now is minimal. Businesses are expected to take a step forward to strengthen their footprints while serving the community.