Leading up to the Industrial Age there would have been hardly any distinction between ‘Business’ and ‘Society’. A person’s livelihood or trade – in these bygone times – would have been influenced mainly by tribal, royal, military or religious forces. It is only with the advent of the Industrial and Information epochs that ‘Business’ has become an established and recognized term.
Today, business and society are intertwined. Business has a symbiotic role within society. For the most part business creates value and enriches societies. But symbiosis, in its ugliest form, may turn into a parasite – one that feeds off another. The Enron and Parmalat scandals are examples of how fraud can lead to a breakdown of trust in society, and leave ‘collateral damage’ to unsuspecting investors, creditors, consumers and employees.
Businesses tread a thin line in organized societies and are constantly being checked for safety, affirmative action, gender and other cultural issues – predominantly by unions and government. Government’s role in society is normally to create rules in which business can operate like Basel III. Businesses are expected to adhere to these regulations. Trade unions often assume a societal voice in business. The most convivial of these relationships would be for business to set up collective bargaining sessions with the unions.
Lately societies are increasingly measuring businesses openness and trustworthiness. Social networking companies like Facebook and Twitter have a delicate role to play as they hold personal data that often needs to be distributed in order to ‘monetise’ their websites. They need to do this with the explicit permission of its users. If they do not follow this law then the society of users will quickly delete their profile and move to more trustworthy home. In the modern era some business’s can be bankrupted with a click of a button.
Businesses, by and large, have recognized their influence and power within society. Google – with a profit of over US$ 6.5 billion in 2009 – understands the power they wield. The 6th point of the 10 point corporate philosophy of Google says, "You can make money without doing evil.”
The birth of legal persons (proprietary limited, close corporation etc.) is a particularly revealing feature of ‘Business’. A company becomes like a person with its own rights and separate liability. A person and business, legally speaking, share a common body. On this basic level businesses are the people and the people are business.
It has become common practice for businesses to perform on at least two levels. They must enable shareholders wealth maximization and perform in a socially responsible manner. These dual objectives are not always aligned to society’s best interests.
The deeper we travel into the Information Age ‘corporate social responsibility’ is going to become a clarion call for businesses. We are entering into a world of openness. We live in a world where businesses must be trustworthy. If businesses aren’t trustworthy they will face the wrath of a swarm of well-informed and connected consumers.
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