Over the next couple of weeks, we’ve asked our writers (and guests) to respond to the question “What is the Social Responsibility of Business?” Please comment away or contact us if you’d like to offer an opinion.
By Carla Rover
The phrase “big business” has become, for many, a cringe-worthy epithet. It is most frequently synonymous with the worst in human behavior – moral apathy, the incessant disruption of efforts to improve the lot of the common citizen, and at worst, sinister designs on the rights, privacy and liberty of the bulk of society. Still, equating the orchestrators of the global economy with comic-book style villainy is counter-productive, and perhaps equally distracting to our best efforts at creating a more enlightened and equitable human society.
The social responsibility of business is great, certainly, but it is not necessarily at odds with profit, modernization, or economic freedom. Bringing big business and social consciousness together is a daunting task, but it is not impossible. First, let’s get the basics down.
Consumers have the right to the truth about international commerce
The idea that vast sums of wealth have to be created solely through the exploitation of the poor and the working classes through substandard wages, environmental exploitation or scanty workplace safety regulations are some of the most pervasive and resilient lies of the industrial age.
Big business bought it, and so did we. Exploitation happens because the cash-ravenous beast that is industry can’t easily find a plausible way to squeeze profits out of slim and unstable price margins, so wages are driven down to unlivable levels or outsourced to countries with a negligible history of labor reform. It’s a rotten way to do business, but the discourse of the socially conscious has not yet penetrated most business schools and boardrooms. Businesses live on money, in vampire-like fashion. It can’t be helped. So, multinationals often inadvertently manufacture global poverty along with the latest gadgets for wealthy nations. Granted, some corporations are built to extract profits at any human cost, but neither instance of violation of conscience needs to exist for business to flourish.
Consumers have the right to a participatory economy
Big business, while operating in a profit-driven arena, may also make moral decisions out of a profit-centric impetus which would make even the most dogmatic Ayn Rand devotees proud.
Fair wages create more consumers and more stable communities with ever-burgeoning needs for retail outlets and more products.
Consistent growth requires a sustainability plan that is not predicated upon large pockets of economic inequity due to low wages and economic ghettoes.
When the bulk of our consumer base can participate fully in the economy, business can survive, and even flourish in ways that allow for long-term, strategic growth. Consumer dollars and labor fund the economy, and by extension, the state of the socio-economic system as it is.
Consumers are the real “engines” of the economy and therefore have a right to take ownership of the way their dollars are utilized in order to create an economic system that provides equitable access to all those within a society. A strong, productive society with low poverty levels inevitably has a much healthier economy than one plagued by high-levels of income inequality, crime, poor health and everything else that goes with it.
While one might point to Europe’s long list of entitlements as a counterpoint to this argument, countries like Norway, which actively pursue social responsibility hand-in-hand with promoting economic growth can prosper. A business doesn’t have to be run by “bleeding heart liberals” in order to care about the plight of the poor and its own employees globally, it just has to be thinking logically about long-term profitability.
Consumers have the right to truth in advertising
Truth in advertising is not simply the idea that corporations must not make blatantly false claims – consumers have a right to the whole truth, not the most convenient portion. Truthful advertising goes back to sustainability.
Products and advertising practices which deliver what they promise offer shareholders and consumers equal protections – and that means long-term customer loyalty. The CEOs and management of major corporations whom I’ve interviewed as a journalist have told me the same thing repeatedly: consumers won’t stand for practices which affront their common sense or impinge on their rights.
Consumers data privacy is one issue that won’t go away. Clicking on an ad or even visiting a webpage is much more than a casual action. Every webpage impression adds to the ever-burgeoning digital identity which follows consumers across the web. That data becomes a part of our public identity and the lack of transparency around who knows what about our Web-viewing habits, purchases and searches is problematic for consumers and retail brands alike.
Marketers, and, by extension, brands depend on accurate consumer data to target advertising and special offers to the most relevant demographics. When consumers don’t interact with advertising and offers, brands waste their advertising budgets and consumers become increasingly numb to their efforts. Letting consumers know how, when and why they are targeted by marketers gives them the option to opt-in or opt-out of certain marketing practices, thereby saving brands money and making marketer’s efforts more efficient.
Consumers have the right to make informed product choices
Crossing intellectual boundaries into marketing gray-areas is risky as well. The recent backlash against high-sugar, high-fat foods being marketed to young children, for example, isn’t simply a debate about the government transforming into a meddling Nanny State, it is a deeper moral question about the responsibility of adults to place ethics above morally dubious methods of extracting profit.
Should we be actively promoting products with 39 grams of sugar to teens in a nation where as much as two-thirds of the population is obese? Probably not, but for that moral impetus to make sense in a amoral world of business, we need change to arrive at the product development level as well as the consciousness level.
Businesses should see that here as well, sustainability enters into the equation. Healthy foods are better for kids, and will sell better than “junk foods” when they are offered with the same impassioned marketing creativity as the cholesterol bombs that we are so used to seeing on TV. Making healthy, socially-conscious products is smart for business, and a great driver of profits- but those profit arrive in the long term. Better products, whether food products or household appliances, can mean a healthier, more economically productive society.
Can we make this marriage work? Yes, this is at least my hopeful view. Rather than trying to make business less profit-driven, why not make it clear that sustainability is a better road to profitability?
Carla Rover is the editor of The Advertising Technology Review