How does your business’s success impact our communities—and our world?
By Chris MacDonald, Ph.D., Interim Director, MBA Programs, Ted Rogers School of Management, Ryerson University, Toronto
When it comes to the ethical and social responsibilities of business, no topic has received more attention than the relationship between doing good and doing well. It’s fundamentally a question of whether doing good things in the world is, or can be, a source of profit, and whether that is okay. And for many people, it boils down to a question of which—doing well or doing good—is ultimately the point of business.
The issue is made all the more compelling, psychologically at least, by the fact that the comparison between the two ideas—doing well and doing good—is something of a play on words, since in other contexts “well” and “good” are sometimes used interchangeably. “How are you?” a friend asks. And you respond, “Good, thanks! How are you doing?” Then he says, “I’m doing well.” But when it comes to business, many people want to emphasize the way the two concepts come apart. One is about how well things are going for you as a result of your business’s success, and the other is about how well things are going for your community as a result of your business’s success.
Perhaps the two go hand in hand. Many have pointed out that any minimally decent business does good in the world simply by providing a product or service that people want. Every honest, voluntary business transaction, after all, makes both parties better off. That means most successful companies are able to thrive only because they do good for many, many customers. Day in and day out, they provide value. In the aggregate, that’s a lot of good! Microsoft, for example, has done an enormous amount of good in the world, over the last four decades, by giving millions of businesses the ability to use the kind of sophisticated computer technology that was once reserved for government-funded research labs. (Editor’s note: Read more about the good that Microsoft is doing in “Inside the Heart of a Tech Giant.”) In that sense, Bill Gates probably did more good for the world during his years as Microsoft’s CEO than he has through the admittedly wonderful work of the Bill & Melinda Gates Foundation.
For some, the link between doing good and doing well is a matter of cause and effect. There are a lot of ways in which businesses that do good, that is, behave ethically, stand to do well financially. To start, behaving ethically is the key to building trust. If your customers feel as if they have been treated fairly, they’ll trust you, and trusting you means not just buying their next car from you but the one after that and the one after that. And many consumers today are motivated to make purchases from companies they feel act as good corporate citizens. Ethical behavior can also be a good way to attract and retain talent. People want to work for companies they can believe in. Finally, acting in a socially responsible manner can also be a way to get ahead of the regulatory curve, and to avoid putting your toes too close to the line that separates the unethical and the illegal. In sum, wise managers since time immemorial have recognized that the best way to build long-term profits is to pay your bills on time, treat your customers well, clean up your own messes, and be a good neighbor—that is, to be and to do good.
What’s really at stake here is the relationship between two measures of success in business: doing well financially and doing good things for your community or for the world in general. Ancient Greek philosophers would have had trouble even understanding the difference. In their view, the two notions were intrinsically bundled, under a concept that we might translate roughly as “thriving.” To thrive means experiencing material success—it’s hard to thrive if you’re starving—but it also means being a certain kind of person, or organization, namely one that embodies certain ideals about what kind of person, or organization, we should be. And for most of us, that means the kind that does well, certainly, but that also manages to do good along the way.
Chris MacDonald, who has a doctorate in philosophy, is Interim Director of MBA programs and teaches ethics and critical thinking at the Ted Rogers School of Management at Ryerson University in Toronto. He also is Director of the Ted Rogers Leadership Centre and the co-author of two popular textbooks. His scholarly research has focused on business ethics, healthcare ethics, and the ethics of technology, a moral philosophy. He has been the author of the award-winning Business Ethics Blog (businessethicsblog.com) for over 10 years.