In 1970, American economist and statistician Milton Friedman wrote a groundbreaking essay in the New York Times on the purpose of business. In it, he states that “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” For years following the essay, this idea has driven corporations of all kinds. However, in recent years, things have changed.
With more businesses contributing to the betterment of society as a whole, many people view businesses as a necessary part of human advancement. That makes many businesses an inextricable part of society as a whole.
And, conversely, businesses need society to gather the resources that they need to thrive. They earn their income from selling their products and services to a given community. That means it is always in a company’s best interest to take care of social factors as they relate to the community at large. These factors are referred to as social objectives.
What are Social Objectives?
In essence, social objectives are goals that companies set in order to better their effect on society. It is one of the main types of business objectives. This can cover a wide range of ideas because social goals may be different for each organization and the communities that they serve.
Here is an incomplete list of many of the most common social objectives adopted by many larger businesses:
Protecting the Environment
Preserving the Earth and including sustainable practices are definitely at the top of many organizations’ lists as primary social objectives. Companies must begin and continue to decrease their carbon footprints. This is done by reducing consumption and recycling materials whenever possible.
Keeping Prices Reasonable
Of course, we know that businesses exist to satisfy the community’s needs by providing us with services and products that we desire. That said, these wares should always be sold for a price that matches their worth. Peddling items at exorbitant costs is a manipulative business practice that should be avoided.
Avoiding Unfair Trade Practices
This social objective can cover the avoidance of a whole range of unscrupulous undertakings, including adulteration, black-marketing, and hoarding. Manipulative advertisements that make false claims about products and services certainly fall under this category.
Donating to Charity
One of the most common social objectives for companies is making generous charitable donations. They do this by supporting causes that are important to their customers and employees, any of which may reflect the business’s culture and values. Donations don’t always have to be financial, however. Many times, companies donate goods and services to community members in need.
A huge social service that most companies provide is gainful employment for those who reside in their areas. Unemployment is a blemish on today’s youth because the economy is not what it once was in previous generations. That is why businesses must generate jobs to benefit society, as well as their own needs.
Diversifying the Workforce
Diversity of a company’s employees is a surefire way to show society that you adhere to the social goals of our times. Businesses nowadays are focusing more than ever on providing inclusive workplaces that hire people from a wide range of backgrounds. Respect and tolerance are promoted in such environments and this diversity can lead to new ideas and greater success over time.
Providing Employees with Fair Pay
Successful businesses owe a lot to their hardworking employees. The future of any company lies completely in their hands, and great workers tend to build organizations that thrive. As prized assets to their companies, employees should be paid for their contributions.
This doesn’t just mean reasonable pay for a job well done. This also means acknowledging their efforts with generous benefit packages and significant bonuses, when deserved.
Making Community Contributions
Earlier, we discussed standard charitable donations by businesses. However, this is not the only way to make contributions. Businesses may also set social goals for giving back to the local area. That means they may offer scholarships or internships, or build libraries, hospitals, or research institutions. Many may even set up foundations that are formed for the distinct purpose of funding charitable endeavors.
Specific Examples of Social Objectives
There are many examples of how companies can take the basic list of social goals listed above and put them into action. There are no real rules about how businesses are required to display their social responsibility. It all depends on the business’s size, time available, and the amount of money that they have to share.
One example would be giving money to a hospital or a doctor to provide free medical care to the poor or the unhoused can benefit the community in several ways. Residents may be able to receive treatment for both physical and mental health disorders and suffer less as a result. This would demonstrate the company’s dedication to improving the lives of those in the area by assisting people in need.
Another example of a social objective for a company would be environmental responsibility. For example, a company could choose to focus its resources on supporting renewable energy by installing equipment such as solar panels, windmills, and waterwheels, organizations. By doing this, they will no longer need to consume organically-derived fuel.
Organizations may also want to invest in education. This could be done in many ways. Companies can choose to pay for the further education of their employees. Also, they may decide to provide extensive on-the-job training, such as a mentorship program or an apprenticeship. They may even offer grants to employees so they may continue their schooling in anticipation of getting promoted within the company.
Why Have Social Objectives as Company Goals?
Service should always precede with any thought of turning a profit. This means not just providing your immediate customers with value, but thinking about providing all of society with value. If you are going to offer products and services to the public, before you make any sales, you must be sure that what you are selling benefits society as a whole. This will ensure your business’s success in the long run. It shows that you care about others and aren’t simply out to make a quick buck. That said, if your organization has a great reputation you will most likely see a gradual rise in profits anyway.
Many business scholars over the years have emphasized the need for large companies to prioritize social service along with making money. Today this idea is most often referred to as “corporate social responsibility.” However, it has been a core principle of thought leaders for years before it has been talked about so widely in the media. Most agree that it is more important than ever to focus on these social goals for businesses to fulfill their duties to society.
Reasons Why Social Objectives are Important:
- Increasing Motivation and Engagement: Social objectives can increase engagement from employees and can even motivate them to work harder. That is because they are employed by a company that they believe has their best interests at heart.
- Attracting and Keeping Top Talent: Commitments to social goals can make a business look quite attractive in the eyes of potential hires. It can also encourage current workers to stay with a company that is more responsible than those represented by recruiters attempting to lure them away.
- Building Brand Loyalty: Today’s consumers are more conscious than ever of aligning with businesses that support their community and are aware of their social impact. Such social goals are important to companies hoping to reach their customer base and reflect their values.
- Enhancing the Surrounding Community: Making positive contributions to the community in which your business operates gives the area advantages that it may not normally have. It is always good business to give back to the people who helped you grow in the first place.
- Improving Company Reputation: Caring about social goals shows not only customers that you are committed to societal betterment. Your investors, stakeholders, and partners will also be proud to be a part of your organization. That means better investment opportunities as well as an increase in revenue.
- Cutting Costs: Some social goals can even contribute to savings for the company. Just think, if you are reducing the amount of waste that you are creating, you will save on the cost of trash disposal. Or, if you donate money to a charitable cause, you will get a tax write-off.
Social objectives are created because many business owners have the best intentions of giving back to their local community. Social objectives also aid companies in reaching their business goals. That means that while companies are meeting such important milestones, they are also changing the world around them for the better, and everyone can appreciate that.