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Business Behavior | ||
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Burgess COMMENTARY Yes ... there is an improvement in the conversation about business behavior, but actual behavior is changing for the better at a glacial pace. Investors for the most part are only interested in their wealth growing and do very little to change behavior in favor of better social and environmental outcomes. In my view, business will change for the better as soon as customers revolt and only buy from companies that behave in a responsible way and buy products that have the best possible value profile. Peter Burgess | ||
Opinion
Opinion: The new corporate citizen is in it for the long run
The Business Roundtable – a group of the country’s CEOs – made headlines this week when its chair and CEO of JPMorgan Chase, Jamie Dimon, announced that maximizing shareholder profits can no longer be the driving force and sole priority of businesses. Although this may seem surprising, the writing has been on the wall for some time. Trends of the last few decades have culminated in a reconfiguration of expectations and roles. Americans’ discomfort and/or dissatisfaction with the economy, disillusionment in government and political institutions, and generational change have profoundly impacted the way business must engage. First, it is becoming increasingly clear that despite rising productivity, low unemployment and a growing economy, large segments of the American public are feeling disconnected from prosperity or uncomfortable with wealth disparities. About 6 in 10 adults believe the nation’s economy unfairly favors powerful interests, according to the Pew Research Center. And a 2019 Pew study found that adults under 30 had a favorable view of both capitalism (52%) and socialism (50%). (A 2018 Gallup poll showed support for socialism among young people holding steady while they soured on capitalism.) Even wealthy CEOs – including Dimon and Bridgewater Associates’ Ray Dalio – have called for an examination of our capitalist system and whether it can still deliver on the American Dream. At the same time, Americans are becoming more disillusioned with government institutions. Earlier this year, Americans’ trust in government to handle domestic and international problems shrunk to its lowest level in two decades. Frustration with the pace and effectiveness of government action has led to more local, community-driven efforts. Public-private partnerships and social entrepreneurship used to be a rarity. Now they are seen as necessary and normal for government to “do business.” Low expectations for government are coinciding with new expectations for corporations ushered in by generational change. The rise of the Millennials brought us open work spaces (no more individual offices), flattened business organizations (teamwork, not authority), and launched a new front in social media warfare (influencers, Twitter campaigns, “trending”). It also changed consumer interactions with business. Many now believe their dollar matters more than their vote. This may be destructive to democratic political engagement, but it has reshaped expectations for corporate citizenship. Companies can no longer ignore social impacts when making business decisions and courting consumers. A controversial decision that maximized profits in the short term may have been a no-brainer a decade or two ago, but the lasting damage to the brand in today’s environment requires a new calculation. Witness the sea change at Nike, which took the position in the 1990s that it could not be responsible for worker exploitation in factories it didn’t own. After a public backlash, Nike changed its policies. Now, the company publicly posts inspections of its global factories, coaches factories overseas, and is widely viewed as a leader in addressing global working conditions. Critics have suggested that the call to consider more than profits is hollow propaganda. But acting with the civic interest in mind is good business, whether it is motivated by true altruism or the need to build consumer loyalty. Small business owners have long understood that their path to success lay clearly in the communities they served. Seeking only the bottom line is a foolish and short-sighted strategy when you work, play, and live next to your customers, employees and business partners. And while technology and globalization may have made businesses large, they also made the world suddenly smaller and more connected. And it is these connections – multinational businesses and their small-town employees and consumers, CEOs and their social media followers, community leaders and their stakeholders – that ultimately will require businesses to behave and lead like good citizens in it for the long run. Even if it hurts the bottom line in the short run. Stidvent served as assistant secretary for policy at the U.S. Department of Labor. She is the principal of Stidvent Partners in Austin, consulting on public policy, corporate citizenship and business development. -------------------------------------------------------------------- 4 As state crews begin cleanups, homeless prepare for move 5 Voters approve 9 of 10 Texas constitutional amendments 6 Beto O’Rourke ends presidential bid Never Miss A Story Subscribe to Austin American-Statesman OUR PICKS
By Veronica Vargas Stidvent
| Posted Aug 21, 2019 at 3:19 PM The text being discussed is available at | https://www.statesman.com/opinion/20190821/opinion-new-corporate-citizen-is-in-it-for-long-run and |