Social Purpose: A Prerequisite for Business Success

Abstract The notion that businesses have a responsibility to contribute to society (social purpose) beyond being an engine of economic growth is not new. But recently, social purpose has become the object of increased attention among the public due to a decline in their faith in government and NGOs, and a commensurate increase in their demands that businesses engage in addressing social issues. This increased demand among people that businesses rely upon to succeed (customers, employees, investors, and community members) has made having a strong and action-driving social purpose a prerequisite for business success. At the same time, the increasing pressure on businesses to weigh in on social issues from the stakeholder groups that drive an organization’s financial success is a strong basis for linking social purpose activities to business performance. Business performance-related matters are indisputably the domain of executive decision-making. These linkages allow businesses to defend their actions on social issues from the criticism that they are merely pushing a political agenda and accusations of overreach. A clear, strong, and well-promulgated social purpose can protect a company from politicization and accusations of opportunism but only if it is actioned consistently.