Words have different meaning in different context. Capitalists have been shown as cruel people with single minded focus on profit . They are not bothered about the larger well being of society. Over the years , things have changed. The government plays an important role in regulating business. Firms have to compete and play by the rules. In the modern world, business needs to be responsible to the challenges faced by society and the world. Super capitalists like Bill Gates and Warren Buffet, Mark Zuckerberg of Facebook are super philanthropists too,championing the causes of the poor and the challenges faced the world.
Business is important for society as it organizes production and distribution of goods and services for people. It brings innovation and increases productivity, introduces better techniques of production , employs people, pays taxes to the government and makes profit for its investors .
A responsible business does all this playing by the rules and norms set by the community and the government . But there is more to this term Responsible Business . As I see there two main challenges which our world faces and businesses can’t be oblivious to these challenges . The first challenge is environmental problems due to economic development and burning of fossil fuels which are impacting nature in negative way. The second challenge is the prevailing inequality in the world between the rich and the poor . These problems will increase in their proportions as population of the world will increase from existing 7 billion to 9 billion in next 30 years, though most of the increase will happen Africa where consumption level is very low .
Business has the three important factors what in management jargon is said ” Triple Bottom Line ” . People, planet and profit . There is going to be tough balancing act for any company to do as the scope and range of competition at the market place are getting sharper everyday.
The economic and scientific and technological development of last 200 years have brought enormous benefits to mankind but there are downsides with serious consequences . The use of plastics is one case which is so harmful. It is choking the drains, pollutes water bodies and is non biodegradable . We need an alternative to plastics for packaging and other uses .
Companies drain their untreated chemical effluents to fresh water rivers . That is creating serious problem to large number of people. There are many examples where planet friendly business processes create higher cost to the company which affect their competitiveness at the market place . This is serious dilemma for any company to create a right long term path.
A company which can balance people Profit and Planet or triple bottom line is responsible business. A very few is venturing out in that direction in real sense. Most of the initiatives are on surface and for media and government consumption while maximizing profit remains the main mantra.
The economics and accounting measurement need to change to reflect the ideal balance which a company has achieved and that also gets rewarded at the marketplace. . Without thinking long term and aligning the personal goals with larger social goals, nothing much can be achieved .That is precisely the role of enlightened leadership. Responsible Business will stem out of responsible , visionary and enlightened business leadership.
Responsible business will come out of only from responsible leadership.