With the recent discussion of Amazon and the biosphere they want to build, I’ve been thinking a lot about how for-profit organizations contribute to society and asking a few questions too.  What are they obligated to do as community stakeholders?  Where do they draw the line?  How do their actions contribute to business success?

amazonbiosphereWe live in a time where the ongoing raison d’etre of business is questioned from a philosophical standpoint in academia, and from a practical perspective from younger generations.  Why do businesses exist, after all?  That’s a loaded question, due to it presupposing capitalism as their existence platform.  Regardless, the main reasons I hear from smart business folks and in academia are two.  The first could be seen as cold to some, they exist to make money (the “good” side of this coin is that they money exchanged in  allows people to expand their livelihood).  The second seems a bit more altruistic, they exist to solve problems and add value for people.

I subscribe to both of these ideas.  Economically, people need a means by which to procure supplies for living and capitalism has provided the most successful route to do so in our history as a species.  It may not fit your ideological aspirations for society, but there is no denying the proliferation of the system as an economic boon.   As a marketer, I look at the entirety of businesses in existence and see them as being able to be boiled down, by all rights and purposes, as adding some form of value for the market and the people in it.  It’s why I pay someone to work on my car, to make me a meal and even hold my money for me.

These organizations add value for people, or would go out of business.  People will not pay for something that doesn’t in some way help them, or could be done better and hence add more value by another business.  In this way business is constantly evolving and in most instances improving.  It’s a nonstop competition.

In the midst of this cutthroat commercial darwinism, we have companies of enormous size with control over immense amounts of capital.  Very large organizations with worldwide scopes and billions of dollars in revenue and income as well.   At the heart of this matter is the inescapable truth that these resources are controlled by individual human beings.  Human beings, though my favorite group of animals, are prone whimsy and bias.  They do not make the right decisions at every chance, sometimes they don’t make the same decision when presented the same question in small increments of time.

It is that fact that creates intrigue around how they choose to allocate capital and to what ends.

This again brings us back to that original idea of why businesses exist (avoiding the moral fulcrum of whether or not business is “good” or “bad” for society.)  Knowing a business, or all businesses, raison d’etre should logically help to understand what they should do and why.  What they do is relatively contextual in most instances to their line of work, whereas why they do things should be much more clear cut.

Based on previous explanation, businesses exist to make money and/or add value for people.  But if a business only exists to make money, has it any care for factors outside of that goal?  For public companies, the duty to maximize profit does loom over decisions.

That’s why examples such as Amazon making this biosphere is an interesting concept.  It is not for public use, per say, but there is undoubtedly value in such an architectural spectacle.  But it also brings up more philanthropical ideas, such as Zappos revitalizing Las Vegas.  I’m visiting this with a friend who works there in a few weeks, I’ll probably post again on it soon.

Where does the line between “maximizing shareholder value” and community building blur?  Is there a line at all?  There’s a very good argument that most of what businesses do has a positive result for society due to economic stimulus and the positive feedback resulting.  There’s also a very good argument that the effects of business decisions made for short term profit can have long term negative implications, climate change being the most obvious issue facing us currently.

I truly believe the new generations of young people see business differently.  My generation certainly falls into this, but I’m actually thinking forward to the upcoming generations and how they will approach commerce.  We are currently coming up against very real resource constraints (water, food, energy, raw materials) for a growing population racing toward eight billion living people on our planet.  There are finite amounts of resources.  The repercussions of our decisions today will affect our species as a whole down the road.

More and more I’m noticing the way business being done changing, and a great deal of it seems more based around sustainable business practices.  That’s a great thing and something I’ll continue to watch.  There is no reason that a for profit organization cannot add value for society as a whole in all aspects of operations, beyond just economic, and I’m eager to see continued progress in the “why” aspect of how businesses operate, as well as the “what.”