In preparation for an article I’m writing, today I interviewed a professor of business ethics. During the course of our conversation he suddenly turned Socratic. “What is a company’s most important social responsibility?” he asked.
I wasn’t sure, but I said it should be something along the lines of the Hippocratic oath (“First, do no harm”).
Professor Richard liked my response, but said that he teaches the late Peter Drucker’s philosophy: A company’s primary social responsibility is to make a profit.
The reasoning is that, to contribute to its community and sustain its employees, a company must be profitable.
I can’t argue with the logic. But I do find the concept interesting, from an ethical perspective.
Companies tend to be single-minded in the pursuit of their goals. And if making a profit is their primary—or even their only—aim, historically companies tend to make bad decisions. (This was how we ended up with a dangerous car because the cost of settling litigation was deemed to be lower than the cost of redesigning the car.)
If I had a bit more spare time, I’d love to research whether there are any companies that incorporate a “no harm” clause into their operating models. Would such a company even survive? Probably not. In today’s hyper-competitive world, the profit and loss sheet is king. But it sure would be an interesting experiment.