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SOCIAL PROFIT ORIENTATION
Say goodbye to CSR and rather embrace ‘social profit orientation’
By our African Marketing Confederation News Team | 2024
Researchers say that making social progress part of an organisation’s central mission generates profit and fosters societal well-being.
New international research is showing that businesses can achieve financial success by embracing critical global issues such as climate change, poverty, human rights violations and medical breakthroughs as a core mission.
The study, published in the peer-reviewed Journal of Marketing, explores ‘social profit orientation’, a concept where organisations simultaneously generate profit and foster societal well-being.
Social profit orientation differs from corporate social responsibility in that social progress is part of the organisation’s central mission, rather than a by-product of its activities.
The research was led by Professor Leonard Berry from the Texas A&M University, with researchers from Monash University in Australia, Fordham University and St John’s University in the US, and the Norwegian School of Economics (known as NHH).
Photo by Eva Bronzini from Pexels
The study investigated social purpose organisations such as Oportun, a mission-driven personal loans business, an educational not-for-profit called First Book, giant cloud-based software company Salesforce, and an Australian medical research organisation, the Children’s Cancer Institute (CCI).
Achieved a competitive edge and attracted top talent
It found both for-profit and not-for-profit establishments achieved a competitive edge, attracted top talent and drove innovation when adopting a social profit orientation.
“The life-quality challenges of modern society – climate change, poverty, hunger and homelessness, inaccessible health care, wars, pandemics, and more – alter what society needs from corporations and other organisations,” Professor Berry explains.
“Generating financial profits, [while] noble and important, is no longer enough. Society needs organisations to invest their skills and resources to also create social profits through initiatives that specifically enhance the well-being of people [and] the planet.”
Professor Tracey Danaher from the Department of Marketing at Monash University, says establishments with this orientation proactively invest resources such as knowledge, infrastructure, labour, reputation, money and time to enhance the common good, improving the well-being of people and safeguarding the health of the planet.
“We found that the organisations with a social profit orientation benefited through enhanced reputation and trust, stronger stakeholder relationships, improved employee retention, engagement, and attraction, which ultimately positively impacted their financial performance,” Danaher states.
According to the researchers, the following are the key steps to building a social profit orientation:
- Align employee and organisational values to create a unified mission.
- Ensure organisational resources and governance structures maximise societal benefits.
- Inspire executive and board leadership to deeply commit to social profit goals.
- Make informed investment decisions that focus on initiatives with the greatest social impact.
- Measure and evaluate social impact rigorously to ensure meaningful contributions.
- Foster external partnerships and communicate purpose through compelling storytelling.
You can find out more about the research, titled ‘Social Profit Orientation: Lessons from Organizations Committed to Building a Better World’, here.
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