Companies are also making an effort to measure the non-financial factors that create value. Researchers have found, for example that people prefer to work for companies that demonstrated a high level of ethics and social responsibility, so these organizations can attract and retain high quality employees. Customers pay attention too. A study by Walker Research indicates that, price and quality being equal to two thirds of customers say they would switch brands to do business with a company that is ethical and socially responsible. Enlightened companies realize that integrity and trust are essential elements in sustaining successful and profitable business relationships with an increasingly connected web of employees, customers, suppliers and partner. Although doing the right thing might not always be profitable in the short run, it develops a level of trust that money cannot buy and that will ultimately benefit the company. Many companies are becoming more socially responsible because they believe it provides a competitive advantage.
Some organizations are taking social responsibility to the extreme, building whole companies that combine good business with good citizenship. Maria Otero is CEO of ACCON International a leader in the microfinance industry ACCION partners with existing banks to give tiny businesses in poor countries. For example, a Bolivian woman used a $100 loan to start a bread making business using the mud oven in her one room home. Six year later, she borrowed $2,800 to expand to five mud ovens and a backyard storefront or consider Mitch Tobol. Tobol runs a full service marketing agency in Port Washington, New York that serves client such as Weight Watchers International and Long island Savings Bank. However, he and a friend also started an organization called Sparks, serves 20 members taking them to sporting events dinners and the theater giving them opportunities to build strong social bonds and do the kind of things most have never had chance to do. Unlocking Creative solution through People box describes anther cutting edge organization that combines good business with good citizenship.
A new breed of entrepreneur has emerged – the social entrepreneur. Social entrepreneurs are leaders who are committed to both good business and changing the world for the better. Social entrepreneur have a primary goal of improving society rather than maximizing profits, but they also demand high performance standards and accountability for results. One writer referred to the breed as a cross between Richard Branson (high powered CEO of Virgin airlines) and Mother Teresa. Social entrepreneurship is not new, but the phenomenon has blossomed over the past 15 years or so, and the organizations being created defy the traditional boundaries between business and welfare. For example, David Green founder of Project Impact helped to start a factory in India that makes inexpensive plastic lenses used for cataract surgery. The factory provides lenses some at no cost for 200,000 poor Indians a year. It also makes money – 30 per cent profit margins in 2003 –and has captured 10 per cent of the global market for intraocular lenses. Green has expanded his approach to other parts of the world as well as the United States, and is adding hearing aids to the product mix. The organization created by social entrepreneurs may or may not name a profit. But the bottom line for these companies is always social betterment rather than economic return.
Not every organization wants to become this closely involved in solving the world’s social problems. However, companies that make an unwavering commitment to maintaining high standards of ethics and social responsibility will lead the way towards a brighter future for both business and society.
Source: New Era Management