The definition of a business concern that we have studied at college is certainly true; that a business organisation operates like an entity with a purpose to make profits.
To me back then, it made sense that the sole purpose of a company was to make profits but I could not understand how it was an entity with an identity of its own like a human being. More than a decade later, after having worked in several corporations, I continue to disagree with the definition. But only with its second half.
A company certainly does operate like an entity with its worldview, way of working and goals manifesting the aspirations, the will and the level of fulfillment of its top management and in highly evolved organizations; the employees at all levels. We in Pakistan, for instance are certainly aware that a Seth owned organisation reflects the ethos of the Seth; be it the way it treats its employees or the way it sells its products. It does not matter if the Seth has been educated from the Ivy League or has only been to the local high school. If the Seth believes that he knows best how to get his work done, then his company works with his spirit, his moral values and certainly his intent. That is why we see new CEOs taking over and reshaping the destinies of their organisations with their own will and action.
That companies indeed are entities is why we see that corporations whose ethos are instilled by a set of diverse people often emerge as strong players in whichever industry or region they operate. Multinational concerns are a case in point. Companies like Unilever, Proctor & Gamble or Nestle spend enormous amounts of money for hiring and retaining their people for it is these people which imbue their character into the company.
Coming back to the second half of the business concern’s definition. Is a company’s sole raison d’eter to make profits?
That is like saying, human beings are a species who live for the purpose of earning money. That’s a rather dangerous definition of a human being! It fails to take into account that money is a means to an end even if you leave aside the debate on the kind of means it is.
Likewise, saying that a company’s purpose is to make profits is like exonerating it from its social, legal and moral responsibilities. That is perhaps why we have seen phenomenal damages made to the planet and its people, by business entities that operate on the premise of existing for profits and managed by people whose purpose in life is to earn enormous amounts of money.
Some critics argue that the moral mumbo jumbo should be limited to pressure groups, governments and religious doctrines at best and that companies are only meant to create abundance. However, this argument is increasingly losing force as companies themselves are realising, as a popular CSR expert Mallen Baker says, that ‘they cannot operate as islands of prosperity in a sea of abundance’. That is why business giants all over the world like Microsoft, Shell or ICI to name just a few, are turning towards their social responsibilities.
Corporate Social Responsibility is the realisation that a company does not just live to make unbridled profits. It is the awakening of a company to its logical way of existence by being a channel to the flow of abundance. That the only reasonable and sustainable way of making profits is to share it with the planet and its people who created it in the first place.
The pinnacle of this wisdom will be achieved when companies realize that they have to engage in serving the community VOLUNTARILY. That they have to have an intent to serve the people making their profits whether they are within the company or are buying their products. There are companies that serve their people and communities because others are doing it. There are those who do it because it whitewashes their excesses committed elsewhere. There are those who do it because it gives them a good name and there are those who do it when there is a lot of profit a portion of which can be spent on charity.
All of these companies need to clarify their intent. These companies fail to realize that CSR or the act of serving back as a voluntary commitment is not a public display of apparent generosity, it is not a whimsical exercise only to be carried out in times of comfortable prosperity and it is certainly not a cosmetic effort meant to conceal other unethical ways of doing business by the company. Serving back is the only reasonable way for a company to survive and sustain in a depleting planet. And serving back with the intent to fulfill one’s duty to the planet through all times is the only honest way of serving back. At the end of the day, like an individual, a company that is honest to itself shall be the one that has achieved true success.