Profits or societal development - Where should a business house's focus lie?

Making profits or addressing social and environmental Issues - Where should a business house focus?

Business, profits, sustainability and social responsibility all the fours words are hooked up with each other in today’s world. There is an ongoing debate on the subject that businesses have to reconnect company with social progress. Do you find social and environmental issues are more important than business or somewhere they are a part of profit making process?

Yes

• Efforts and time spent in addressing social and environmental issues are a mere distraction from the core activities. The efforts spend in these causes can be utilized in making productive plans for the company or the money spend can be used to carry out the necessary research.

• It is only by generating profit that companies can create more opportunities for employment. People like to get associated with the company who can offer them a secured job that is possible only when company is making profits.

• Even if the company wants to make a big donation or want to solve the social issues it needs money. And the money comes only when company had just one task and that is to focus on growth and productivity.

• Investors and stock market don’t take decisions on the basis of how much effort a company makes to solve the social and environmental issues. They want the solid balance sheet to invest in any company.

• Working for social causes is just a reputation management to get the clean chit of a productive and green company. The efforts can cover up negative impacts by saturating the media but the benefit is short lived.

• Company cannot sustain in the competitive market without profitability but it can sustain without its focus on social and environmental issues. Profitable company can live the time when economy is in financial turmoil. Growth creates growth and creating profits is the key to driving growth in businesses.

No

• Talk about the resources and you will see the private sector has ample resources. They are the one who can bring a difference in the society by contributing money, efforts and time to address the problems like poverty, climate change and other global challenges. Take the example of Reliance Industries. Its NGO is working in association with Satyamev Jayate to bring a change in society.

• Profits come when companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence. It is an intangible asset. Starbucks coffee prices are much higher but still it is a preferred choice and sells well as the part of sell is used to promote the people who grow the coffee for company.

• It makes their brands more attractive to consumers. Consumers are concerned about the many factors like child-labor-free clothing, lower environmental impact, and absence of genetically-modified materials or ingredients. Procter and Gamble donates a part of their sales profit in the education of children.

• It makes it easy to recruit and retain employees, resulting in a reduction in turnover and associated recruitment and training costs.

• Investors don’t want to put in the money which is not liked ad appreciated by the consumers. Image management is one of the tools to drive the growth.

• It is a form of risk mitigation as there is the obligation to comply with the well defined government and legal rules. Environmental issues if left untreated can create legal complexities for businesses.

Conclusion

Do the social and environmental issues pave a way for profits or it is the profits that enable greater spending on social issues? The debate will go on. But seeing the recent developments in the industry there is near complete agreement that corporate citizenship is no longer an option, but a requirement in the present time.