Читать книгу The Mission-Driven Venture - Lane Marc J. - Страница 12

Chapter 1
Nothing Stops a Bullet Like a Job
Businesses Drive Social Change

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Consider, for example, the TATA Group, India's largest private employer, whose more than eighty companies employ 200,000 people in steel, automobile, software, consumer goods, and telecommunications ventures. About two-thirds of the equity capital of the company's parent firm, Tata Sons Ltd., is held by philanthropic trusts established in the 1860s. The TATA Group's founder, Jamsetji Nusserwanji, noted long ago that “in a free enterprise, the community is not just another stakeholder in business but is in fact the very purpose of its existence.” Decades later, Manoj Chakravati, another corporate officer, framed the company's mission this way: “Corporate Social Responsibility should be in the DNA of every organization. Our processes should be aligned so as to benefit the society. If society prospers, so shall the organization…”

To Ratan Tata, a former chairman of the TATA Group, writing with Stuart L. Hart, Aarti Sharma, and Christian Sarkar in the June 18, 2013, issue of MIT Sloan Management Review, “the maximization of profit is not a purpose; instead it is an outcome.” Their thesis is: “Profits are like happiness in that they are a byproduct of other things. Those who focus obsessively on their own happiness are usually narcissists – and end up miserable. Similarly, companies need a purpose that transcends money; they need sustainability strategies that recognize that you can make money by doing good things rather than the other way around.”

The strategy has worked well over the long term: Tata Chemicals first introduced iodized salt to address iodine deficiency, then fortified iron in Tata Salt to combat anemia. The company has also invented an affordable, nanotechnology-driven water purifier that has transformed the barren village of Mithapur in Gnjarat into a thriving community. The company went on to create an “Innovation Centre,” built exclusively around social issues and sustainable value. The initiative has been a leading driver of revenue, profits, and jobs.

A duty to contribute to the social good has recently been incorporated into Indian corporate law. The Indian Companies Act of 2013, which took effect on April 1, 2014, mandates large firms in India (including many American multi-national enterprises) to follow the TATA Group's lead and exhibit greater social responsibility. Firms with a net worth of Rs 5 billion (about US $82 million) or more, annual turnover of Rs 10 billion (about US $164 million) or more, or net annual profits of Rs 50 million (about US $820,000) would be required to invest at least 2 percent of their annual profits on CSR initiatives. Jamsetji Nuserwanji's legacy continues.


Or look at the Bosch Group, a leading global manufacturer of automotive, building, and industrial technology as well as consumer goods. Following a tradition established by its founder, the company sees social and environmental issues inextricably linked to its future: “If Bosch is to remain a stable company, [it must] come to terms with the instability of the world at present. Accelerating globalization, the need for environmental protection and impending energy supply shortages mean that Bosch's corporate strategy must take into account social and environmental concerns.” And, indeed, it does: the company has embraced the core labor standards of the International Labour Organization, acknowledging human rights, equality of opportunity, the rights of children, and fair employment conditions.


And then there's Mozilla Corporation, a wholly owned, taxable subsidiary of the Mozilla Foundation, which manages Internet-related applications such as the Firefox and SeaMonkey web browsers. The corporation, which handles the revenue-related operations of the foundation, invests most of its profits back into Mozilla projects to “promote choice and innovation on the Internet.” Mozilla is a sustainable, transparent community, which demonstrates that commercial companies can benefit by collaborating in open source projects. Market mechanisms support Mozilla's public-benefit mission.


To cite still another example, Raytheon, the international aerospace and defense contractor, is committed to energy conservation, safety, and diversity. MathMovesU, the STEM education initiative to which the company has contributed more than $100 million since 2005, helps build the U.S. talent pipeline to encourage the next wave of innovators and technologists. Pam Erickson, Raytheon's vice president of community relations, sees that, “Good corporate citizenship is good business.”


Garrett Hasenstab, the director of sustainability at the Verdigris Group, the real estate development group, seems to agree. He notes that the company's CSR policy is at the core of its daily operations. Verdigris' clients value its environmentally conscious work because they seek a healthier, more productive, energy-efficient world. No doubt he's right: customers and employees alike are demanding that corporations everywhere operate sustainability and ethically, thereby contributing meaningfully to the global community we share.


Perhaps most notably, TOMS Shoes has built its brand around a buy-one-give-one charity model ever since the company's founder Blake Mycoskie's heart was touched by the enormously disadvantaged barefoot children of Argentina. At first, the well-intentioned Mr. Mycoskie didn't see that a free pair of shoes doesn't bring education, public health services, or economic development to the poor and might, in fact, foster an aid-based local economy. Rather than helping solve a social problem, in-kind charitable donations might actually sabotage local businesses and distort local markets. To its credit, TOMS Shoes is rethinking its business model, for example, committing to manufacture some of its shoes in Haiti, employing Haitians and helping build a sustainable shoe industry there. TOMS understands that merely giving goods to the impoverished, although making its consumers feel good, won't itself ameliorate poverty.


The truth is that Corporate Social Responsibility (CSR) should not be uncritically accepted as a legitimate reflection of a company's commitment to deliver a positive social impact. Some skeptics see CSR as a public relations counter-offensive to offset the ill will that results from a company's perceived social or environmental underperformance or, as in the case of TOMS Shoes, a misdirected, albeit compassionate, branding strategy. Others, following the lead of hawkish economist Milton Friedman, who provocatively insisted that “the social responsibility of business is to increase its profits,” continue to dismiss any suggestion that corporations owe a moral duty to society.

Yet, Friedman's take may not radically diverge from the view of Adam Smith, the father of modern economics, who, in his iconic 1776 work, The Wealth of Nations, famously declared, “What improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy of which the far greater part of the members are poor and miserable.”

Milton Friedman could foresee a place in our economy for the mission-driven venture. In 1970, when defending profit as the ultimate goal of business, he allowed for the possibility that “a group of persons might establish a corporation for an eleemosynary purpose – for example, a hospital or school. The manager of such a corporation will not have money as his objective, but the rendering of certain services.” Although Friedman wouldn't have endorsed a manufacturer's dedication of its profits to launch a soup kitchen, neither would he have objected to a business whose mission is to run soup kitchens successfully within the free-market system. Nor would he have quarreled with a profitable business's pursuit of a market opportunity that provides a direct societal benefit. To him, selling fresh produce in a food desert might make perfect sense; giving away that produce undoubtedly would not.

Although Milton Friedman and other free-market capitalists might support the notion that some private enterprises could legitimately serve a public good, they generally draw a bright line between corporate good – the pursuit of profit – and social good. The opposite view, espoused by noted Harvard Business School professor Michael E. Porter, who popularized the notion of “shared value,” invites companies to “take the lead in bringing business and society back together.” To function, capitalism needs both a brain and a soul. Without accepting, even embracing, their social and civic responsibilities, most enterprises today simply would not survive.

The Mission-Driven Venture

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