Every December, we talk about the importance of giving back. This not only applies to individuals, but to businesses as well. And it’s not only in the month of December that we should be mindful of this — it’s year-round. Being a socially responsible business could increase profits and the talent of your employees in the process.
The social responsibility of business is a concept in which businesses maintain awareness of their need to make a profit while at the same time working to benefit the community they are in.
Today, many businesses are very aware of the importance of giving back to society. For example, many companies help nonprofit organizations by collecting food, clothing, personal care products, blankets and other items, which is especially meaningful during the holiday season when many in society are in need of a helping hand. Others include an entire social responsibility strategy as they plan out the year ahead.
According to the 19th Annual Global CEO Survey, which interviewed 1,409 CEOs from more than 80 countries, 64 percent of CEOs believe “corporate responsibility is core to everything” they do. That is expected to increase to 70 percent in the next five years.
Corporate social responsibility has become extremely important to consumers today when making their purchasing decisions. A global analysis by Nielsen showed 55 percent of online consumers would pay more for a product from a socially responsible company.
It’s not only consumers who recognize a company’s corporate social responsibility; a recent report from Cone Communications showed 58 percent of employees “consider a company’s social and environmental commitments when deciding where to work.” In that same study, 74 percent of employees said “their job is more fulfilling when they are provided with opportunities to make a positive impact.”
Some, however, don’t believe that businesses should contribute in some way to the betterment of their community. The economist Milton Friedman famously wrote a New York Times Magazine article in September of 1970 entitled “The Social Responsibility of Business Is to Increase Its Profits,” explaining this was the case as long as the company stayed within the rules of law. In the article, Friedman explained that he believed businesses shouldn’t initiate social expenses beyond what they are regulated to do. Some 46 years later, some businesses neglect their responsibility to their communities they are located in and continue to follow Friedman’s philosophy.
Personally, I believe it’s important for corporations to give back to the community, because without the community and those purchasing their goods and services, they wouldn’t be in business. Corporations should not only remember this, but should also incorporate this into their business practices.
In being a good corporate socially responsible citizen and in the spirit of corporate sustainability, as we approach this holiday season let us not only look to individuals to give back to their communities, but to the businesses that provide goods and services to us to contribute their fair share, as well. If both individuals and businesses give back, this will help many, and it will make our communities safer and more prosperous.
Darrell Brown, Ph.D., is a clinical associate professor of management and director of diversity at Indiana University Kelley School of Business Indianapolis.
