San Diego Thomas Friedman recently wrote about Facebook quoting, Dov Seidman, CEO of LRN, which helps companies and leaders build ethical cultures, “the business of business is no longer just business. The business of business is now society.”
He may be right.
Amazon, Berkshire Hathaway and JPMorgan Chase have announced they were partnering to create an independent company aimed at reining in health-care costs for their U.S. employees.
Google has donated more than $353 million in grants worldwide, and Googlers are encouraged to volunteer time to support nonprofits. Qualcomm announced a $25 million commitment for educational programs that will help with efforts nationwide to bridge the “Digital Divide.” While the commitment is only a beginning, it is attracting other companies too. This is a major effort to use technology to raise the living standard of less developed nations.
In fairness, Qualcomm was recognized last year as one of the leaders in social responsibly and donated more than $225 million in disaster relief, response and rebuilding efforts. The company has always encouraged its employees to contribute their time and money to causes they care about. The company matches the personal donations.
The late management guru Peter Drucker once said: “Management is doing things right; leadership is doing the right things.” He told the story of Julius Rosenwald, CEO of Sears Roebuck who warmly embraced and supported the 4H Clubs, which in turn, made Sears highly profitable.
The concept of the “social responsibility” of business — now engrained in the psyche of most corporations — is an ethical theory that corporations, like all of us really, have obligations to do things to benefit society at large. Many corporations — through their foundations mostly — routinely support schools, homeless centers, performing arts organizations and the like. This is corporate responsibility to be sure, but it is or can be more than philanthropy. It can and will be the way the world does business.
For most of the history of the corporation and capitalism itself, the wisdom of Milton Friedman, Nobel Prize winner of economics, was the corporate mantra: “The social responsibility of business is to make a profit.”
Now we are entering a new era.
It has occurred to corporate executives that it’s in their interest and their stockholders to actively develop a “social responsibility” platform. For most of us, we are already looking to our corporations for civic leadership ... to worry about education, religious freedom, equality, labor laws, the environment, and other pressing matters affecting a nation’s wealth, health and well-being.