In recent years there has been a push to hold businesses accountable for their actions and the impact they have on society. This all came to a culmination in the summer of 2020 when tensions were high and consumers felt that the businesses they patronized should be advocating for change. Many businesses came out in support of protesters and others that were called out for gender or racial inequality vowed to remedy this. Businesses have a duty to serve their consumers and if change is what they want to see businesses (especially large corporations) should find a way to make it happen. Another point that was made is that because we live in a capitalist society, these large corporations wield a lot of power when it comes to politics. Obviously they use this power to advocate for their own interests, but they only wield that power because of their consumers. Many of these consumers felt that since the companies they patronize impact policy, they should influence it with the customer’s best interest at heart.
Blog By Estelle Bah
PMG Intern
What I have described about companies “watching out” for their consumers is called Corporate Social Responsibility. Although CSR is a huge step in the right direction, it makes it seem as though the interests of businesses and their consumers are always at odds. A lot of CSR is about companies sacrificing their own profit in order to do what is right. This is often the case, that in order to benefit society or their consumers businesses will have to lose out on pleasing their shareholders. However, in order to sustain long term change, consumers cannot expect companies to keep losing out on making money. This is where CSV or Creating Shared Value comes in. CSV emphasizes finding solutions that are both advantageous for businesses and the communities they serve. There is more overlap than was once believed and the key word to understanding CSV is Innovation. When corporations and their constituents stop fighting, you find that there is a lot of good to be done that benefits everyone. One example of CSV is companies reducing their packaging or rerouting their truck routes to be more environmentally friendly which ends up saving them up to hundreds of thousands in packaging. Another example is companies investing in wellness programs for their employees that have been shown to improve mental health. Not only are healthy employees more efficient, it actually reduced the amount they ended up spending on health care.
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