Introduction

How would managers of businesses or business owners answer the question: why are you in business? Would their answer differ depending upon who was asking the question? Would any be bold enough to answer that they’re in business to make money and that there is nothing wrong with making a profit?

They might hesitate before they answered along those lines. Like many, they might start off by talking about social responsibility, making a difference and serving their customers and community. And there’s nothing wrong with that. But are social responsibility, making a difference and serving customers and community necessarily incompatible with making a profit.

Greed is one thing: enlightened self-interest is something entirely different. The simple irreducible minimum is that businesses have to interact with the environment. Managers would not be doing their jobs if they didn’t seek out opportunities to further the interests of their businesses.

There are always competing interests; however, acting socially responsibly is not something that competes, but is something that synergises with, business interests. Consider this: enlightened self-interest and social responsibility are not diametrically opposed pursuits. They are more than just compatible pursuits: they are synergistic pursuits.

What follows is written in general about undifferentiated businesses. However, my business is domiciliary care and I should argue that what I have to say below applies without any exceptions to that particular area of business activity.

Enlightened Self-Interest

Adam Smith, I should suggest, got it about right when he wrote that “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Smith wrote those words in the 1770s in what is probably his most well-known work An Inquiry into the Nature and Causes of the Wealth of Nations. It expresses very succinctly the idea of enlightened self-interest.

In more recent times, In her book, Body and Soul, Body Shop founder Anita Roddick explains how enlightened self-interest and social responsibility work together when she talks about looking for “… the modern day equivalent of those Quakers who… made money because they offered honest products and treated their people decently… “. There’s nothing wrong with making money: it is how that money is made that counts.

Anyone who goes into business must believe that the pursuit of profit is the right thing for businesses to do. However, it does not follow from this that when businesses act they must only take into account their own interests. On the contrary, acting in ways that may appear to be in competition with a business’s interest may be decidedly advantageous. As Lynn MacDonald says: “Enlightened self-interest recognizes that a company’s prime purpose is to make profits, but that this goal can be achieved by fulfilling its social and environmental responsibilities.”

Social Responsibility

It’s little wonder that the business world gets a bad press. Stories are heard too often about corporate greed, unethical selling practices, misleading advertising, shoddy goods, even shoddier customer service, poor treatment of employees and the list could go on. The thing that is quite simply downright mystifying is why people in the business word insist on behaving like this when acting socially responsibly is better all round? As the Times Business Case Studies explains:

“Corporate social responsibility can bring significant benefits to a business. For example, [it] may: attract customers to the firm’s products… make employees want to stay with the business… attract more employees wanting to work for the business… [and] attract investors and keep the company’s share price high… “.

If that is correct, and I believe that it is, it seems perfectly clear that acting in a way that is socially responsible is an act of enlightened self-interest. By acting responsibly, businesses are acting in a way that best promotes the interests of those businesses.

The socially enlightened answer, then, to the question why are you (whether you are a manager or business owner) in business is that businesses are there to make a profit from socially responsible business practices.

Source by Garry Costain