THE ROLE OF BUSINESS
Changes in social values and expectations which have occurred since world war II have created for many business managers demands to which they often are poorly prepared to respond. Trained in the economics of the nineteenth and early twentieth centuries and indoctrinated with social philosophies of earlier times, businessmen have viewed themselves as being primarily responsible for high economic performance and profit. Businessmen have been accustomed to working in a predictable environment,. i.e., an orderly system in which business objectives were formulated at the top of the organization and business activity was judged by economic performance. However, in recent years the public, through dramatic and sometimes disruptive means, has demanded a voice in establishing business objectives. These bottom-up-pressures have left business unsure of exactly what its role should be.
Most business leaders actively support community action programs in their own communities as a means of exercising social responsibility. They view involvement in community problems as good corporate citizenship. They believe that business should be involved just as other members are involved and should cooperate with other institutions in finding solutions to problems of the local community. For example, many companies have operated centers for the job Corps; established and operated legal-aid offices for disadvantaged citizens; participated in Community Chest drives; participated in river or lake beautification projects; helped organize and finance minority businesses; and donated money, equipment, and executive talent to a variety of other community projects. In cooperation with government, business has trained hard-core unemployed and supported nondiscriminative hiring. While many of these activities have been successful in their own local areas, they have had only mimimal impact on the broad overall social problems because, in large part, they have treating localized symptoms rather than addressing the central problems.
Most business leaders actively support community action programs in their own communities as a means of exercising social responsibility. They view involvement in community problems as good corporate citizenship. They believe that business should be involved just as other members are involved and should cooperate with other institutions in finding solutions to problems of the local community. For example, many companies have operated centers for the job Corps; established and operated legal-aid offices for disadvantaged citizens; participated in Community Chest drives; participated in river or lake beautification projects; helped organize and finance minority businesses; and donated money, equipment, and executive talent to a variety of other community projects. In cooperation with government, business has trained hard-core unemployed and supported nondiscriminative hiring. While many of these activities have been successful in their own local areas, they have had only mimimal impact on the broad overall social problems because, in large part, they have treating localized symptoms rather than addressing the central problems.
Profit
Many thoughtful leaders in society feel that the profit motive is the real key to bringing corporate resources to bear basic social problems. Few, if any, corporations could for long periods of time afford to channel large portions of their resources toward solutions of any problems, social or economic, without being paid for their expenditures. Many feel, to one degree or another, that business is making a social contribution by performing its economic functions effectively and efficiently. And this view is supported by at least one eminent social scientist. Theodore V. Purcell says: ‘I argue that management has a social responsibility to make a profit.’
Only by making profits, it is argued, can business maintain and increase the assets which are so necessary for solving the immense social problems facing America today. Experience has shown that direct expenditure of money, by itself, on problems such as urban decay, pollution, transportation, hard-core unemployment, and poverty has done little to produce lasting solutions. Most businessmen and many government leaders believe that these problems can be solved only by bringing to bear the research and development expertise of business along with its organizational and productive resources. These activities require a strong economic base and must be paid for from profits.
Only by making profits, it is argued, can business maintain and increase the assets which are so necessary for solving the immense social problems facing America today. Experience has shown that direct expenditure of money, by itself, on problems such as urban decay, pollution, transportation, hard-core unemployment, and poverty has done little to produce lasting solutions. Most businessmen and many government leaders believe that these problems can be solved only by bringing to bear the research and development expertise of business along with its organizational and productive resources. These activities require a strong economic base and must be paid for from profits.
Product Decisions
Closely related to producing profits is the business role of supplying society with goods and services which are consistent with changing social values. Traditionally the role of business has been to make product decisions on behalf of society, thereby allocating resources to the production of goods and services it believed society wanted. Product decisions were made on the basis of social value system as they were perceived by business. How well products satisfied social wants was determined in the marketplace. However, as the economy has changed from one of scarcity to one of abundance, something more is being asked of business. It is being asked to provide products and services that not only satisfy consumer wants but that, at the same time, are consistent with new social values, such as ecological compatibility and consumer safety. Saying it another way, business is asked to make product decisions according to questions of not only will it sell, but is it good for the customer and society.
Assisting Government
It is becoming increasingly clear that before business can effectively work toward solutions to major social problems, there must be an adequate political and philosophical framework within which to work. For example, consider world war II or the space program, which are often cited as models of business performance. The reason that business was able to perform so well in these two situations is that explicit purpose and priorities were set forth by government and were endorsed by a large proportion of the population. But business cannot and should not try to establish that framework. George Cabot Lodge explains:
‘If we are speaking about a wear to remake our domestic society in the U.S., then the initial prerequisite for successful conduct is the definition of the struggle the establishment of goals and priorities, and criteria for measuring victory. When such political and ideology framework is in place, business can work efficiently within it. For unelected businessmen, however, to suppose that they can erect such a frame work is to suggest anarchy.’
All this, then, suggests a new role for business – a role of strengthening government. Roy Ash suggests that ‘an important role of business can be to help government develop its capabilities to function’. George Cabot Lodge is mort emphatic. ‘Perhaps the most urgent and essential social responsibility of business is to contribute to the building of a more adequate political structure and authority based on a clearer, more explicit, and more realistic ideology.’
Assisting Government
It is becoming increasingly clear that before business can effectively work toward solutions to major social problems, there must be an adequate political and philosophical framework within which to work. For example, consider world war II or the space program, which are often cited as models of business performance. The reason that business was able to perform so well in these two situations is that explicit purpose and priorities were set forth by government and were endorsed by a large proportion of the population. But business cannot and should not try to establish that framework. George Cabot Lodge explains:
‘If we are speaking about a wear to remake our domestic society in the U.S., then the initial prerequisite for successful conduct is the definition of the struggle the establishment of goals and priorities, and criteria for measuring victory. When such political and ideology framework is in place, business can work efficiently within it. For unelected businessmen, however, to suppose that they can erect such a frame work is to suggest anarchy.’
All this, then, suggests a new role for business – a role of strengthening government. Roy Ash suggests that ‘an important role of business can be to help government develop its capabilities to function’. George Cabot Lodge is mort emphatic. ‘Perhaps the most urgent and essential social responsibility of business is to contribute to the building of a more adequate political structure and authority based on a clearer, more explicit, and more realistic ideology.’
