When Does Being Socially Responsible Hurt Your Business?
Tuesday, August 13, 2013
Some people argue very passionately that the “business of business is do business” and everything else is an avoidable distraction. Others argue just as passionately that businesses enhance their long-term success by being socially responsible.
While large businesses can spare some extra cash for social causes, entrepreneurial firms of the lean-startup kind cannot afford to be distracted from their core mission, and therefore must be even more deliberate in picking their social commitments.
Here are three questions to ask yourself before taking on a social cause as part of your business strategy:
1. How naturally does a cause line up with your company’s goals?
While it is tempting to be at the forefront of every social issue you care about, as an entrepreneur, you are better off choosing only those causes that naturally align with your organizational mission. This focused approach helps you use your limited resources for improving credibility and building relationships with key stakeholders.
We know from research out of Ivey School of Business that involvement in social causes helps only when it leads to improved stakeholder relationships. General participation in every possible social issue is not of much help to the bottom-line.