Reference no: EM132277378

Should business put purpose before profit?

This article actually discusses Milton Friedman’s 1970 article from the New York Times Magazine that we read in our textbook, and the consequences of this article on society. While a very compelling read with many valid points, Friedman’s stance seems outdated in today’s world. The main point I want to discuss is, as Edgecliffe-Johnson writes, “like it or not, business is already being dragged into society’s thorniest debates, from immigration to LGBT rights, often by consumers and employees who find it easier to influence brands than elected officials.”

I want to argue that profit alone is no longer a sustainable model for businesses and their investors. In the world of social media and “viral posts” and “trending topics”, everything you need to know about a business is a hashtag away. And while you can’t always believe everything that you read online, bad publicity, especially when related to a social issue, spreads like wildfire. Edgecliffe-Johnson gives several examples in this article, most notably financial planning and investment corporation BlackRock coming under fire for having stocks in a gun company following the Parkland school shooting. It is increasingly evident that social issues must be a priority for today’s corporations.

One interesting point made in this article is, “how to measure something as vague as purpose, which can encompass anything from treating suppliers fairly to cutting carbon emissions”. Many of these definitions are very subjective. What is considered fair to one supplier may be unfair to another one. I’ve read various CSR reports, and while many initiatives sound really good on paper, the end results are usually expected in many years, and nobody is truly holding these companies accountable for achieving their promised results. Regardless, I believe doing something is better than doing nothing.