B2B Monday Myth: A Brand’s Social Involvement Is Unnecessary

by MGB2B

benefits of corporate social responsibility

The Myth: A Brand’s Social Involvement Is Good But Unnecessary

The Truth: When Done Well, Corporate Social Involvement Can Reap Many Benefits for Your Company

In 1970, American economist, Milton Friedman, made the bold claim that:

“There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

He believed that attempts to achieve social goals would create market inefficiencies, distorting the free market system and ultimately creating social costs. While most businesses are now aware that social responsibility can at the very least boost their reputation, there are many that avoid social responsibility altogether. And contrary to Friedman’s thinking, it is avoidance that can cost you, not participation.

Nearly 50 years after Friedman’s New York Times article, we know that social responsibility and economic goals are not mutually exclusive. It is in the best interest of the company to balance them. That balance is valued by stakeholders, employees, vendors, and most importantly – prospects.

These Are the Benefits of Corporate Social Responsibility:

  1. Bring in Stronger Employees. Companies are respected for social efforts, which means you can use it to increase employee loyalty and may even attract better talent.
  2. Increase Efficiency, Lower Costs. Sustainable business practices can actually increase efficiency and lower costs over time.
  3. Better Relationships with Public. This includes not just an enhanced reputation, but improved relationships with suppliers and distributors and goodwill in the eyes of public officials and prospective customers and clients.
  4. Increase Profits. Contrary to Friedman’s original claim, it is widely believed today that corporate social involvement actually increases profits. Even if it doesn’t happen immediately, the benefits to the long-term financial health of the company are nearly indisputable.

Haven’t yet incorporated social responsibility into your business’s platform? We’ll discuss how you can do that next week.

 

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