Idea in Brief
The Problem
Corporations are being pushed to dial down their single-minded pursuit of financial gain and pay closer attention to their impact on society. But how can a company balance the two?
The Research
The authors have studied companies around the globe that pursue financial and social goals simultaneously. They find that the successful ones build a commitment to both economic and social value into their core organizational activities.
The Solution
Companies that want to do well and do good should focus on four key management practices: setting and monitoring dual goals; structuring the organization to support both goals; hiring and socializing employees to embrace them; and practicing dual-minded leadership.
Corporations are being pushed to change—to dial down their single-minded pursuit of financial gain and pay closer attention to their impact on employees, customers, communities, and the environment. Corporate social responsibility from the sidelines is no longer enough, and the pressure comes from various directions: rising and untenable levels of inequality, increasing evidence that the effects of climate change will be devastating, investors’ realization that short-term profitability and long-term sustainability are sometimes in conflict. For reasons like these, a growing number of business leaders now understand that they must embrace both financial and social goals.