Doing Well While Doing Good: 5 Lessons on Empowered Consumers and Responsible Business
A new virtuous cycle?
Businesses need to be profitable to sustain themselves. And, more and more, they need to sustain and promote values consumers care about in order to be profitable. These days, the public scrutinizes how profit is made, and an age of viral videos and social media means a company’s reputation can be on the line in an instant.
Darden research shows that customers — and workers — care about corporate social responsibility, and actions speak louder than press releases. Those stakeholders are increasingly aware of their power to influence corporations, which have the power to influence society.
These Darden Ideas to Action articles discuss the evolving relationship of business and society and examine companies actively addressing societal challenges — as well as what we can learn from those that have faltered.
Customers Care About Corporate Behavior
In an in-depth study of public and private companies in 14 global markets, Darden and APCO Worldwide investigated the extent to which customers care about how a company conducts itself. In “What Makes a Champion Brand? 10 Champion Brand Survey Insights Every Business Leader Needs to Know,” Darden Professor Bidhan L. Parmar and Laura Hennessey Martens discuss the growing impact of companies on society, the rising standards of the public and the increased frequency of stakeholders taking action. In their words, “Globally admired brands focus less on products and more on practices.”
Society and Business Are on New Terms
Just as companies have a growing impact on society, so society has a growing impact on companies. The public’s expectation for business to address social needs is increasing, and stakeholders have the power to effect change. Trends in pop culture, social media, social issues, workforce demographics and the next generation of employees have dramatically transformed the landscape in which business governance, strategies and communications now operate. As Professor Emeritus James R. Rubin and Barie Carmichael explore in “Corporate Accountability: How a Company Proves Its Character,” success now means finding the center of the Venn diagram of business, customer and society interests.
Business Strategy Is About More Than Business
The C-suite leader who ignores this new landscape will be in rough waters; strategy is now about pressures beyond traditional issues of competition or supply and demand. Nonmarket forces — like government regulation, environmental activism and human rights nonprofits — have increasing power over a company’s reputation, which can change overnight. In “Strategy Beyond Markets: The Intersection of Business, Public Policy and Ethics,” strategic management scholar Professor Michael Lenox explains “beyond market strategy.” At the intersection of business, ethics, sociology, public policy, economics, psychology and law, this new way of thinking about strategy is a business imperative.
Companies Can Improve Society and the Bottom Line
Economic inequality may be one of the defining challenges of our time. Income mobility has decreased, and the reinforcing loops of economic and opportunity inequality correlate with health and societal harms. Professors James R. Freeland and R. Edward Freeman delve into the way high-profile corporations are working to improve the problem. Based on ideas they teach in Darden’s “Economic Inequality and Social Mobility” course and one installment of a three-part series, “Economic Inequality, Part 3: What Can Business Do About It?” focuses on how companies can be part of the solution, using specific examples from companies like Netflix, Goldman Sachs, UPS, Google and The Container Store.
We Can Learn From What Went Wrong
Cautionary tales: In “VW Emissions and the 3 Factors That Drive Ethical Breakdown,” Professor Luann J. Lynch explores how company culture led to massive damage of a once-sterling reputation. With “Communicating Through a Crisis: Wells Fargo Circles the Wagons, Professor June West looks at scandal at Wells Fargo from a crisis communications standpoint and explains what stakeholders need to hear to rebuild trust. And “Unethical Moves From MoviePass” features ethics expert Professor Andrew C. Wicks’ observations on the line between the customer’s and company’s responsibilities when opting out of an agreement.