RE-CREATING BUSINESS AS A SOCIAL ENTERPRISE.

Abstract

There is growing realisation today that companies cannot continue to operate the way they have in the past, because they cannot sustain the usual practice of plundering resources merely for a profit. There is also a rethinking about the model of capitalism that dominates world economies. It is increasingly being felt that while the economic system has contributed to increased wealth and better quality of life, it also has deep negative environmental and social impacts. Profit generation and maximization, while being legitimate objectives of companies, must therefore also be accompanied by economic, social and environmental betterment. In other words, the world is heading to a more “humane” capitalism. Companies realise that the “business-as-usual” approach – one in which natural resources are exploited ruthlessly – is creating problems of pollution and sustainability across the globe. If such development goes unchecked, we are in for great social and environmental upheavals that may destroy the planet completely. The re-orientation of business as a social enterprise is now recognised as essential for the future of business itself. Writing that the global economic system is under threat, Bower, Leonard and Paine point out in their book, Capitalism at Risk (2011), “business must serve both as innovator and activist – developing corporate strategies that effect change at the community, national, and international levels.”Stigliz (2002) had written, “Globalization today is not working for many of the world’s poor; it is not working for much of the environment; it is not working for the stability of the global economy.” We have a system today in which the rich are reaping the benefits of development, while vast numbers of poor live in deprivation. It is also being felt that the limits of sustainability have been reached – the planet cannot sustain the runaway consumption that the economic system dictates. This can best be described as an unstable system. A positive future for the planet depends on a new paradigm that links business and development and promotes social, economic, and environmental stability around the world. Corporations thus have a broader role in society. Porter and Kramer (2002) write, “We are learning that the most effective way to address many of the world’s most pressing problems is to mobilize the corporate sector where both companies and society can benefit.” It is time that companies understood that social and economic goals are integrally connected. Preserving the environment benefits not only society but companies too, because reducing pollution and waste can lead to a more productive use of resources. Boosting social and economic conditions in developing countries can create more productive locations for a company’s operations as well as new markets for its products. Because of this understanding, companies too are realising that they have a broader purpose than the blind pursuit of profits. The future or rural marketing depends on how companies fulfil their objectives of profits, sustainability and inclusive growth. Indeed, many companies are doing so. This paper analyses the corporate initiatives taken to empower local communities and introduce a sustainable way of doing business. It takes pointers from these experiences and tries to draw conclusions as to the nature of future business. It also dwells on the future of capitalism that may well evolve due to changes in business thinking.