Applying Rousseau to the corporate world

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Milton Freidman claimed that “the business of business is business.” In the latest issue of the McKinsey Quarterly, Ian Davis disagrees. He also speaks out against what he calls the “fuzzy” arguments of corporate social responsibility. He writes from somewhere in between these two “tired ideological positions” :

Large companies must build social issues into strategy in a way that reflects their actual business importance. Such companies need to articulate their social contribution and to define their ultimate purpose in a way that is more subtle than “the business of business is business” and less defensive than most current CSR approaches. It can help to view the relationship between big business and society as an implicit social contract...

Davis goes on to discuss how such a contract could be constructed, and how it should be incorporated into corporate strategy – a strategy that he says would ultimately benefit shareholders in the long-term.

[Also available via the Economist]

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