How can businesses be socially responsible? Does your business give back to the world?
In Conscious Capitalism, John Mackey and Rajendra Sisodia make specific recommendations for meeting your responsibility without sacrificing anyone else’s needs. One of these responsibilities is contributing to society.
Check out how businesses can uphold their social responsibility.
Business’s Responsibility in Society
How can businesses be socially responsible? The authors offer a few suggestions:
1. Be philanthropic. The authors explain that you can donate money to community nonprofits or create your own. You can also partner with local nonprofits by encouraging your employees to donate their time to them. They suggest that you set up community service opportunities during workdays—that way employees aren’t giving up their own free time by participating—and allowing employees to volunteer for projects that are personally meaningful to them, rather than assigning them to an arbitrary cause.
(Shortform note: Some experts recommend that to maximize your philanthropic effectiveness, your company should develop a corporate philanthropy strategy: a plan for contributing to the greater social good that also makes your company more competitive. Part of this strategy might be to sponsor nonprofit programs—for example, by paying your employees to volunteer for an initiative. Experts also note that incentivizing your employees to volunteer directly benefits your company—when employees volunteer, they learn new skills, improve their mental health, and forge a stronger bond with their employer and coworkers.)
2. Learn from your enemies. Mackey and Sisodia explain that entities that are commonly considered the enemies of businesses—like competitors, social and environmental activists, and labor unions—actually count as interested parties because they genuinely care about how your business functions and whether you succeed or fail. They also have a lot to teach you—they bring issues to your attention that you wouldn’t have seen otherwise, like employee unhappiness, which you can then address.
(Shortform note: Another reason to care about competitors, activists, and unions is that doing so may give you a competitive advantage. According to Microsoft CEO Satya Nadella in Hit Refresh, forming strategic partnerships with competitors benefits your customers (which, in turn, contributes to your company’s success). Working with activists can help you stay competitive by helping you meet society’s standards for ethical corporate behavior, which is one factor consumers weigh when deciding whether to buy your product. Similarly, labor unions may help you stay competitive by ensuring you pay competitive wages, which is linked to greater employee productivity—that way, your company gets more bang for its buck.)
3. Foster a healthy relationship with the media and government. The authors explain that a healthy relationship with the media is one where you balance traditional media (which shares updates about your business with other interested parties) and social media (where you’re in control of how your business is represented). A healthy relationship with the government is one where there’s only enough government regulation to stop businesses from harming people or the environment (and not enough to slow innovation), and businesses are taxed fairly—which, in the authors’ eyes, means a low rate, allowing them to invest more in projects that directly support society’s health.
(Shortform note: Experts note that when it comes to traditional media relations, it’s important to nurture a direct relationship between your company and journalists you hope will represent your company positively. Similarly, for social media, it can be helpful to build strategic relationships with influencers who are willing to promote your product or service. As for your company’s relationship with the government, experts suggest educating policymakers about your industry so they can institute regulations that support innovation rather than hinder it. Experts also note that there’s a disadvantage to low corporate tax rates—governments consequently lack the funds to meet society’s basic needs.)
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Like what you just read? Read the rest of the world's best book summary and analysis of John Mackey and Rajendra Sisodia's "Conscious Capitalism" at Shortform.
Here's what you'll find in our full Conscious Capitalism summary:
- That capitalism is inherently good for people, but we're doing it wrong
- How conscious capitalism benefits both consumers and businesses
- How to meet the interests of all parties without sacrificing anyone's needs
