A business that is concerned only about profits is kind of like a person who is obsessed with his or her own body mass index (BMI). While a BMI can tell you vital information, it doesn’t give you a full picture of your health. Similarly, a focus solely on profit that ignores social responsibility does not give an accurate description of the health of a business.
“What always worries me is that people look at corporate social responsibility-related initiatives as just fluff that’s not really important,” said Carla Heim, senior manager for the Business Development Bank of Canada (BDC). “Where it’s actually like having a health check for your self, it’s absolutely vital.”
Starting out as the senior manager of loans, Heim thought social responsibility was such an essential part of a business plan that she created her own position within BDC as the senior manager in charge of social responsibility.
According to Heim, corporate social responsibility is essential for operating a successful business. Social responsibility has become closely related to branding, and managing positive public perceptions has become an integral part of running a successful business. Failing to do so can have a negative effect on a company’s bottom line, she said.
“If you look at the marketplace and how people are spending money nowadays, people care more about the story behind the product or the service,” she said. “I don’t think we have a society that will continue to buy things without asking questions.”
Social responsibility also applies to how a company treats its employees, which can affect profit in a number of ways. By focusing on creating positive relationships with workers, business can develop people who have a real interest in improving the company and moving it forward, she said, adding that good employee relationships also help to reduce employee turnover. This allows businesses to further invest in human capital while limiting expenses related to hiring new people. How employees are treated also effects a company’s public perception.
Businesses also need to consider environmental concerns when operating, she said. Failing to do so could be costly and have a negative effect on brand image.
“[Corporate social responsibility] looks beyond the net profit and the numbers,” Heim said. “The numbers will be there if you run your business in a healthy manner.”
On social responsibility in relation to corporate strategy
“I think the new way of thinking is making societal impact integral to the firms strategy, so its part of a company’s DNA.
