When we think about a successful business, we often just think about a business which maximizes profits and minimizes costs. However, in the age where we are becoming more aware of the multiple social problems, such as global warming or income inequality, social ethics is an important area of business that successful entrepreneurs must consider. During Business Ethics Week this year, WWIB brought in Professor Sandra Waddock from Boston College’s Carroll School of Management to share with us her insights on how to make a difference in the real world.
Professor Waddock reminded us that our world is increasingly out of balance as firms seek to profit maximize. She suggested that the 2007 financial crisis reminded that the free market ideology is flawed, which is why we need to focus more on human interests instead of financial interests if we want to continue seeing real growth. Human interests include social issues such as environmental preservation and fair trade.
Some might think that companies are alleviating this through Corporate Social Responsibility. However, Professor Waddock suggests that this is merely “window dressing” and “corporate cologne” to make companies look good. Even though companies have corporate social responsibility initiatives, they are still selling sugar water, using child labor etc. To really make a difference, we must build a global standard for non-financial gains for corporations. The Global Compact, launched with the support of 47 companies, created 10 principles such as human rights, labor rights, sustainability and corruption. Today there are 10,000 companies in the Global Compact, 7000 of which are huge multinational companies. However, there are 70,000 multinational companies in the world so the initiative does not tackle all problems, and more must be done.
Professor Waddock’s talk gave us a lot of food for thought. She reminded us that we can all be difference makers and starting changing world. Difference makers are not ego driven, or visionaries even – they are system thinkers with strong, core values who take small actions and steps and over time, help to make a difference. Their vision is grounded in action, in actually doing something. We can all can do this if we are willing to take action. We just need to find an issue that we are passionate about, work on it, take action, and make sense of it later.