Why social business matters more than ever

Why social business matters more than ever

February 24, 2012  |  Articles

Socially responsible businesses, cause-based corporations, the “triple bottom line” or whatever else you want to call the seemingly at-odds relationship between businesses goals and social causes has always been a divisive idea.

Nobel Prize-winning economist Milton Friedman argued that the responsibility of the corporate executive is to “make as much money as possible while conforming to the basic rules of society” 1 To a free-market economist like Friedman, the concept of social responsibility is both inefficient and even disadvantageous to a corporation.

However, with the benefit of hindsight and actual implementation, we now see a growing number of corporations and businesses linking social goals to a broad range of different business goals.

On one end of the spectrum, we have businesses publishing Corporate Social Responsibility Reports, which are essentially publicly available social responsibility report cards. On the other, more innovative end, we have companies like TOMS Shoes, which has strategically linked a social cause to their profitability by giving away a pair of TOMS shoes for every pair they sell.

Enter philospher and cultural critic Slavoj Žižek, who offers another criticism of social business which I personally feel is very intuitive and well, persuasive. Here he is featured in a video short by the RSA:

Aside from the incredible illustration skills, the video is also notable for the very straight-forward argument that Žižek that the solutions offered through social campaigns are remedies that do not cure poverty, but merely prolong it, and in fact, are part of the disease that is poverty. How? Žižek contends that by allowing comsumers and corporations to “buy their redemption” through social business missions, the larger, systematic problem of poverty persists and is ignored.

It’s a strong argument because it takes the small incremental solutions provided by social business and pits them against the enormous and seemingly intractable issue that is world poverty. Through such a lens, micro-donations and “buy-one-donate-one” campaigns look inefficient at best, and merely cosmetic at worst.

However, Žižek overlooks three critical elements of modern social business in his critique which I feel better outline its increasingly important role today:


Consumers understand there is a difference between incremental charity and systemic change

People who buy products partly to support a social mission know exactly what they are buying into. They are supporting a piece of a much larger movement. Consumers also understand that incremental change can be a complement to the greater goal – there does not have to be a loser.


There is immediate need for life-sustaining goods and services in developing areas

Someone who lacks drinking water or requires a net to protect against Malaria-carrying mosquitos will not care that someone donated these necessities as part of a purchasing decision. By making charity easy to achieve and in some cases, partially self-serving, social businesses can dramatically increases the supply of these required goods and services.


With the proliferation of social networking, social businesses encourage awareness and create movements

In contrast to Zizek’s argument that social business is only a band-aid solution, the marketing ability of the business world enables social causes to reach more people through more innovative (and expensive) campaigns than ever thought possible.

In the end, social businesses is only one piece of a much larger solution. It just happens to be an innovative piece which leverages the strengths of the market for social change. One thing is for sure – change does not come out of nothing.

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  1. The Social Enterprise Conflict: Working for change within the system | CraveGood

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