New Year`s messages issued by businessmen reflect changes in the business environment and management trends. In the 1970s and 80s, such messages were presented to encourage performance, like "Let`s be No. 1." Following the outbreak of the 1997 Asian currency crisis, the term "global standard" became vogue. Entering the 21st century, the buzzwords "world`s best company" and "global leader" grew popular. The latest catchphrase is "corporate social responsibility." Last year, Samsung Group Chairman Lee Kun-hee cast light on "a truly loved company."
Companies and financial institutions have come under close regulatory scrutiny in the aftermath of the 2008 global financial crisis. The effect of external pressure is limited in getting a company to change since the latter`s primary goal is to earn more profits. But if a company is told to "change or die," this is a totally different story. Rajendra Sisodia, a marketing professor at Bentley College, analyzed 28 exemplary companies that practice corporate citizenship, and found that they earned double the profits of their rivals even without aggressive marketing. Philip Kotler, distinguished professor at the Kellogg School of Management at Northwestern University, said only socially responsible companies that practice corporate citizenship can survive.
The Dong-A Ilbo conducted a joint survey with the Good Management Center of Seoul Women`s University and Research & Research on the differences of socially responsible companies in sales rankings and social responsibility spending. Yuhan-Kimberly, Korea Post and Korea Yakult, all of which have steadily pursued corporate social responsibility, were ranked in the top three. This shows that temporary events and spending alone cannot build a good image. According to a Korea Productivity Center survey of 327 private and state-owned companies, spending on social responsibility showed little difference among private companies and Fortune 500 companies. A company`s image depends not on the amount of money but on where the money is spent.
Yvon Chouinard, founder of the environmentally friendly outdoor brand Patagonia, said, "There is no business to be done on a dead planet." The true purpose of a company is to create jobs and pay taxes via the pursuit of profit, but a company will not survive if society and the investment of contracting companies do not jointly prosper with interested parties such as employees. Even if a company conducts numerous social responsibility activities, lack of a competitive edge to create jobs will ultimately force it to shut down, leading to bigger damage to society. Instead of monetary philanthropy, many companies are "creating shared value" of fighting poverty, water shortages and healthcare while reaping profits.
Editorial Writer Park Yong (email@example.com)