Beyond Profit: Values and Corporate Social Responsibility

Maximizing profits for the shareholders is the prime motivator for corporations and maximization of
shareholder value has been the dominant business strategy in recent decades. As the consequence, these
companies are focused on short-term financial profits and lose sight of the real value which they are
creating for consumers and society. But nowadays the narrow focus is changing. Many businesses are
currently shifting their attention from a short-term profit to long term value creation. Instead of
maximizing only the profits they need to maximize the values of the company and their Corporate Social
Responsibility. Because a business must have reason to exist beyond that of making money and
maximizing shareholder value. Because values and Corporate social responsibility (CSR) is as essential to
building a successful business as sales or marketing.
Corporate Strategic Responsibility is an organization’s obligation to consider the interests of their
customers, employees, shareholders, communities, and the ecology and to consider the social and
environmental consequence of their business activities.
Values are defined the set of guiding principles and fundamental beliefs that help a group of people
function togethers as team and work toward a common business goal
Recognize values in strategic planning
The link between strategy and value-creation is very profound, yet most people seem to put little
energy and emphasis behind serious strategic decision-making. By shifting more of your energy on
strategy, you are spending more of your time on things that matter most; i.e. things that will have the
highest impact on value. So how can we get the organization to strategize more effectively? The answer is
basically a three-fold proposition: Understand Yourself, Understand the Customer, and Understand the
Competition.
1. Understand Yourself (organization): You must understand what drives value within the
organization. And strategies change and move so fast, formal approaches to strategic assessment
may not work. More informal, quick approaches that focus on the real drivers or value systems
seem to work best.
2. Understand the Customer: You must understand what the customer values and what values you
can provide for not just meeting the customer’s requirements but turning the customer into a loyal
and long-term partner within your business.
3. Understand the Competition: You must understand the strategy of your competitor’s. Markets are
now very competitive; you cannot just narrowly focus on the customer alone. You must
understand what makes the competition tick – otherwise you’re in for some nasty surprises.
Recognize the Corporate Social Responsibility four obligations
1. Economic responsibility- its responsibility is to make money. This obligation is the business
version of human survival instinct. The end goal is not simply maximized profits, but positively
impact the environment, people and society.
2. Environmental responsibility- refers to the belief that organizations should behave in as
environment friendly a way as possible. It’s one of the most common forms of CSR. Companies
that seek to embrace environmental responsibility can do so in several way:
 Reducing pollution
 Increasing reliance on renewable energy, sustainable resources and recycled.
  Offsetting negative environment impact: for example, by planting trees, funding research and
donating to related cause.
3. Ethical responsibility- is concerned with ensuring an organization is operating in a fair and ethical
manner. Organizations that embrace ethical responsibility aim to achieve fair treatment of all
stakeholders, including leadership, investors, employees, suppliers and customers.
4. Philanthropic responsibility- it refers to a business’s aim to actively make the world and society a
better place. Organizations driven by philanthropic responsibility often dedicate a portion of their
earnings. It include things such as funding educational programs, supporting health initiatives,
donating to causes, and supporting community beautification projects.

CSR triple bottom-line – Elkington's Triple Bottom Line model encourages businesses to take a broader
approach to business performance. It suggests that there are three key areas of performance: profit, planet
and people.
Here are some quick triple bottom line facts:

 The triple bottom line is a transformation framework for businesses and other organizations to
help them move toward a regenerative and more sustainable future.
 Tools within the triple bottom line help to measure, benchmark, set goals, improve, and
eventually evolve toward more sustainable systems and models.
 The triple bottom line illustrates that if an organization is only focused on profit—ignoring
people and the planet—it cannot account for the full cost of doing business and thus will not
succeed long term.

1. Profit (Economic Sustainability) – one of the many prosperity-focused goals aims to provide
decent work (safe working conditions, living wages, compassionate leadership) and economic
growth forthose in specific communities.
2. Planet (Environmental Sustainability) – Measures impact of business on environment. Over the
past couple of decades, we’ve witnessed an increase of businesses adopting practices that help
minimize environmental impact. Conservation of resources, therefore, becomes tremendously
important, as does the development of new sources of energy that may substitute those we’re
currently using.
3. People (Social sustainability) – measures extent to which business is socially responsible. Social
sustainability doesn’t end with dollars; it also requires human respect. Values balance in people
lives and the way we live. All work, the logic of stability dictates, contains dignity, and no
workers deserve to be treated like machines or as expendable tools on a production line.

John Elkington, a global authority on corporate responsibility and sustainability coined the phrase in a
book in 1997. His argument was that the methods by which companies measure value should include not
only a financial bottom line (profit or loss), but a social and environmental one as well. The concept has
evolved into one that’s often described as three overlapping circles. You’ve probably seen this image
before. Sustainability is typically defined as the place where economy, social realities and environmental
health overlap.

Environment – everything depends or

everything embedded

Social – exist within the environment

Economy – by product of the society

The concept of the triple bottom line mainstreamed the idea of sustainability as including people (social),
planet (environment) and profit (economic). It helped business to understand that long-term sustainability
of an organization required more than just financial equity. It also helped to clarify that when businesses
were considering what sustainability meant for them, it didn’t mean they had to give up the notion of
financial success.
Environment is the circle on which everything else depends, or in which everything is embedded.
Everything comes from nature at some point. Society, which is related to the social circle of the triple
bottom line, exists within the environment. And economy is a by-product of society. Instead of three
overlapping circles, we have three nested circles, where the economy is a wholly owned subsidiary of the
environment.
To achieve sustainability, we need to comply with social and environmental conditions: meet human
needs within ecological constraints. Economic decisions are part of a strategy to make more money while
getting closer to social and ecological sustainability. The economy is a means to an end. Not the end
itself.