Businesses across the globe are embarking on a trend to recalibrate their goals as nearly 200 chief executives, including the leaders of Apple and Amazon, recently vowed in a joint statement to prioritize social goals and that shareholder value was no longer their main objective.
Zhang Yichi, organization and strategy management professor with Peking University’s Guanghua School of Management, urged Chinese businesses, especially startups, to buck the trend by mapping socially responsible and sustainable development plans.
According to Zhang, a so-called social enterprise, despite having the same need to profit, regards investing in employees, delivering value to customers, doing business ethically and supporting outside communities as its forefront goals. Crucially, it gives its profits back to the company for further development or to outside communities it vows to serve instead of giving the money to individual shareholders. When it goes bust, its assets should go to another organization with similar goals.
No longer obsessed with maximizing profits, a social enterprise rises above traditional capitalism, which plays a key part in social inequality and environmental crisis through keeping knowledge and resources under control. Meanwhile, new technologies such as AI and big data are making the situation worse, hinting at the end of traditional capitalism.
That said, far from playing martyrs, pursuing more socially-responsible goals should also benefit businesses as it will boost their reputations, production efficiency and clients’ loyalty while improving their relations with communities and strengthening risk management. This way, businesses will internalize consequences from their activities, known as externality. However, they need to draft sustainable strategies to ensure such development.
In China where governments at all levels are encouraging business startups, a corporate social responsibility trend has yet to kick off, and competition and profits still dominate business operations.
In one of the most revealing examples, piles and piles of out-of-commission bicycles from China’s once prosperous bike-sharing businesses have been bought by a Burmese man and transferred to Myanmar’s far-off places where local students are in dire need of some form of transportation to shorten the commute time between home and school. One’s profits become another’s charity. Such a contrast reflects inadequate society-minded thinking in our businesses.
Our post-capitalism society is now rich enough to actively adopt new technologies as well as new business models to relieve and even solve increasingly severe social and environmental problems, which will require efforts to spot and cultivate socially-responsible business leaders.
Creating socially-responsible and sustainable businesses is a long process, and in order to do that, we should first create a favorable eco-system that encompass talents, market, policy, fund, culture and infrastructure. We need to reevaluate our social environment and cultural atmosphere so as to guide future generations the right way.
Meanwhile, every person plays a part. A society not only needs companies with altruistic motives but also individual care and love, which will serve as a key condition for the creation and prosperity of socially-responsible innovations and startups. Since one thing good for a certain group might be, to a certain extent, at the expense of another, these companies will need people’s understanding and support.