Is doing good in the world good for business?

November 20, 2015

Building businesses with a social conscience

(Originally appeared in M Alumni News—Winter 2015/16)

In business, the bottom line has traditionally been the ultimate truth-teller. Want to know whether a company is successful? Look to its profits and margins. Is a business owner or CEO doing a good
job? Check the balance sheet.

But for many businesses and business owners, the measures of success go beyond dollars and cents—making a positive impact in their community, on the environment or around social issues. That can translate into a double, or even triple, bottom line for some organizations, allowing them to tell a different kind of success story. 

“The question in business schools 20 years ago was ‘is doing good work in the world good for business?’” says Assistant Professor Leo Wong, School of Business, MacEwan University. “Back then it was an academic debate with very little evidence, but now there is a lot of research that shows when businesses invest in socially and environmentally responsible practices, they financially outperform businesses that don’t.”

Today, it’s no surprise to see companies like Microsoft with strong corporate citizenship statements addressing everything from human rights and environmental sustainability, to responsible sourcing and accessibility. Not every entrepreneur has the financial wherewithal to establish the Bill and Melinda Gates Foundation, so the spectrum is broad when it comes to social responsibility.

If Microsoft is on one end, you might find a company like Flatter: Me Belts, whose owner is a regular guest speaker in Leo’s business classes, closer to the other. Claire Theaker-Brown is purposeful in paying higher wages to her small team of Shanghai tailors, improving lives in her adopted city. 

“When you aim to make a difference as a business, it costs you in the short term, but over a period of time you develop a sense of goodwill, reputation, a loyal customer following and employees who like working for you,” says Leo. “It’s just a matter of varying degrees of how much and the approach companies take.”

While many entrepreneurs might start their business with some element of social responsibility, others can only be described as all-in. Earth Group’s founders are also regular guests in Leo’s class. The Edmonton-based company sells coffee, tea and water with the sole purpose of giving back to those in need—100 per cent of its net profits go to the United Nations World Food Program.

It’s this particular breed of entrepreneur that fascinates Etayankara (Murli) Muralidharan, assistant professor in the School of Business. His research is all about figuring out what makes entrepreneurs with a social agenda tick.

“There are businesspeople out there who place social action at the core of their business—far ahead of profit—whether they’re working to eradicate poverty, increase literacy levels or any other social activity,” he says. “At a society level, we need these people who come into business with a larger scheme of things in mind.”

So he’s wading through data in huge international databases, looking to uncover the factors that lead people to become social entrepreneurs. It’s work he’s excited to do and enthusiastic about bringing back into his classroom—in part because of the subject matter, but also because of the reception he’s confident he’ll get from students.

“When I talk about my own research and experience with social enterprise in my marketing and international business courses, the reception is positive and students are interested. It’s a huge difference from the year I spent teaching in the U.S. If I started talking about social responsibility there, students would tune out. They weren’t grounded in it the way students at MacEwan are.” 

Changing the face of business education

The grounding Murli speaks of begins in the very first mandatory business course students at this university take, BUSN 201: Introduction to Sustainable Business. 

“A lot of business schools are playing with the idea of integrating an element of social responsibility, sustainability and ethics into business education, but it tends to be done as a fourth-year elective and not integrated throughout the school,” explains Leo, who is beginning to research the impact that a focus on sustainability will have on students’ personal and professional decisions. “At MacEwan, we’ve
said at a leadership level that we want to integrate social responsibility into our approach and we’ve started doing it strategically in a student’s very first year.” 

Introducing social sustainability early, however, doesn’t mean everyone is on side—and Leo says that’s just fine. 

“In large, first-year courses like Business 201, it’s not unusual to see polarized opinions, and that healthy debate is valuable. We see students coming out of this course saying that it opened their eyes—that they want to pursue social enterprise as a serious option, but there’s no pressure to adopt any particular belief here. We’re presenting information about what are best practices and what’s being done. Students need to understand it, and then decide if they agree.”

Whether they leave inspired to make a social impact or not, graduates will be equipped to think strategically about a company’s missions and values, and how they align with the values of their customers and other stakeholders. 

“We’re not just graduating corporate citizens,” says Murli. “We’re graduating responsible corporate citizens who understand the implications of the decisions they will make.”

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