The Role of Business in Society

I was soaring along, high-speed typing my answers to questions in an email interview for Corporate Citizen 07, when I stopped dead. There, sitting two-thirds of the way down in a series of questions about business planning, was this one:

What is the role of business in society?

My reaction starts with a touch of guilt. I teach entrepreneurship, I write about entrepreneurship all the time, I should have this question always with me.

I do know, at least, that my business has been built on a foundation of giving customers something that’s good for them. Every time we sell a unit of planning software, I am sure that our customer is better off for having spent his or her money with us. We’re doing good to society by spreading tools and techniques for business and marketing planning. My ethics come out just fine with that, we give value.

But the role of business in society, in general? I had to think. And, after coffee and contemplation on a Sunday morning, here’s what I came up with:

Business is an extension of people. It builds things in some cases, moves things around in others, it buys, sells, and distributes. It’s how we get things done.

Each business is an extension of the people who own it. With a small business, closely owned, that’s easy to see.

• Palo Alto Software, for example, our business (me and my family) extends our reach in society with what we choose to develop and sell, to whom, and how, the messages we send, through what media, and how we treat ourselves and our employees.
• Your small business, every small business,  extends your self into the world with more power than you’d have without it.

With larger business the same should apply, but it gets messy. Why do you think restaurants enforce minimum tips with larger groups? Isn’t it because in larger groups (and we’re talking more than 6 people in the normal restaurant, but thousands on the stock market) the dynamics mess with individual ethics? I wouldn’t run my own boat full of oil through the straights in Alaska, but I don’t feel responsible if I own Exxon stock and they do. Note the use of the word “they.”

Are groups responsible for the actions of the group entity? Is a Kerry voter responsible for the actions of the United States under the Bush presidency? What about a stock holder? How much power is there in that relationship. At least, by owning the shares, you are voting with your money, right? And you can change your vote by selling the stock.

Sometimes businesses, even small businesses that tend to have a better link to specific personal ethics, do make compromises. I had one very difficult time in the early 1990s when we put environmentally sound packaging into the retail market, and nobody bought it. We had to go back to more traditional packaging because we almost lost the company.

So what is the role of business in society? What do you think?