There is a great opinion piece in the current issue of Conde Nast Portfolio about “why companies should forget social responsibility — and why we should let them”. I will look for a link later when I get online (found it). It is a great article and you should read it if you are interested in business, society, or the environment. From my read I am pretty sure they are talking about charity and not responsibility, but that is just semantics.
The thing is, a corporation’s job is to make money for the share holders. This is something I learned a few years ago from my dad / business partner / mentor (who also happens to be a business professor). I argued with him about it for a few days (being a philosophy major I can argue a theory to death). Eventually I became convinced. The best thing for society is for corporations to focus on making money for the shareholders and leave the charitable decisions to the individual shareholders. Anything else is an abuse of power by the executives of the company.
The thing is, in order for a company to make money, they need to give consumers what they want. Starbucks doesn’t have “fair trade” options because they wanted to; they have fair trade options because the customers demanded it. Likewise, my guess is that Bongo Java also serves “fair trade” coffee for business reasons and not charitable reasons (I will resist the temptation to speculate on what those reasons may be).
Sip Cafe (my personal favorite coffee shop in Nashville) has two “socially responsible” promotions in their business; these were even part of their opening message. The first promotion is that if you bring your own cup, you get some money off the cost of your drink. The second is that if you walk or ride your bike to Sip you will get some money off the price of your drink. These promotions aren’t for charity, they make good business sense. The first promotion reduces the cost of their paper products (one of the most expensive part of running a coffee shop). The second promotion does two things. Not only does it reduce congestion in their smallish parking lot, it also defines their customer base as local. What we see here is “green” marketing spin because people are receptive to that these days (similar to the “lite” or low fat message of the 80s). I am not discounting the green-ness of these business practices (we use the same kind of marketing spin with our resale clothing store). I am just saying that it only is a good decision if it makes the share holders money. You don’t see any local coffee shops in Nashville using solar electricity yet. Once solar electricity becomes profitable then it will happen. Until then it would be a bad business decision.
There is another green promotion by a local company that I don’t understand. The company is Emma; a email marketing company that I used to do work for. They have a current promotion where they will plant 5 trees for every new account that signs up. I have been perplexed by this one since the first time I saw it. Emma is run by some smart guys so I am sure there is a good reason for the promotion. I am just not able to see it (not that I am all-seeing or anything). I will refrain from speculation, but I would love to know the idea behind this one.
Back to the article.
So, if corporations should only work to make money, what happens when they make money at the expense of society? As the article says, “stiffing workers on health care and polluting can be good for profits”. As a society, we don’t want to clean up and subsidize corporations either. Unfortunately that is exactly what happens all too frequently. How does it happen? Corporate involvement in politics. Just as corporations shouldn’t be charitable, they shouldn’t have a vote either. Unfortunately, many corporations have a vote that counts more than yours thanks to lobbyists. The corporations “vote” for less regulations; yet legislative regulations are how government ensures that corporations don’t make money at the expense of society. This article sums it up great:
“Condemning companies for not giving their employees better pay and health benefits may be emotionally gratifying, but it’s a side-show. What we really ought to be doing is condemning large corporations for polluting our democracy.”
Damn!
