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If we face a recession, we should not lay off employees; the company should sacrifice a profit. It's management's risk and management's responsibility. Employees are not guilty; why should they suffer?

Success means we go to sleep at night knowing that our talents and abilities were used in a way that served others.

Conducting your business in a socially responsible way is good business. It means that you can attract better employees and that customers will know what you stand for and like you for it.

We do not hear the term 'compassionate' applied to business executives or entrepreneurs, certainly not when they are engaged in their normal work. Yet in terms of results in the measurable form of jobs created, lives enriched, communities built, living standards raised, and poverty healed, a handful of capitalists has done infinitely more for mankind than all the self-serving politicians, academics, social workers, and religionists who march under the banner of 'compassion'.

A man's respect for law and order exists in precise relationship to the size of his paycheck.

Note: Business 2.0 is now part of CNNmoney and some older articles are no longer available

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In the last 40 or 50 years, economics was dominant. In the next 20 or 30 years, social issues will be dominant.

I am of the opinion that my life belongs to the community, and as long as I live it is my privilege to do for it whatever I can. I want to be thoroughly used up when I die, for the harder I work the more I live. Life is no 'brief candle' for me. It is a sort of splendid torch which I have got hold of for a short moment, and I want to make it burn as brightly as possible before handing it on to future generations.

A healthy society requires three vital sectors: a public sector of effective governments, a private sector of effective businesses, and a social sector of effective community organizations. The mission of the social sector is to change lives. It accomplishes this mission by addressing the needs of the spirit, the mind, and the body -- of individuals, the community, and society. This sector also provides individuals and corporations with a significant sphere in which to practice effective and responsible citizenship.

The 21st century will be the century of the social sector organization. The more economy, money, and information become global, the more community will matter. And only the social sector nonprofit organization performs in the community, exploits its opportunities, mobilizes its local resources, and solves its problems. The leadership, competence, and management of the social sector nonprofit organization will thus largely determine the values, the vision, the cohesion, and the performance of the 21st century society.

Although the question 'Does corporate citizenship pay?' is technically right, it is misleading in practice. Rephrasing the core question as 'In what ways does corporate citizenship contribute to achieving the core business strategy?' is far preferable.

Â…companies were not designed to be engines of social good. Rather, it was the competition among companies that was designed to be an engine of social goodÂ… companies contribute to democratic solutions by remaining capable of creating the wealth shareholders and governments appropriate, not by taking on the responsibilities of governments.

The role of the corporation "is to provide individuals with the means to be socially responsible. Rather than trying to play the role of social worker, senior executives should concentrate on their statutory obligations. We should not expect benevolence of them, but we should demand probity: the socially responsible chief executive is the one who turns a profit without lying, cheating, robbing or defrauding anyone."

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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Free markets cannot always be relied on to produce socially optimal, or even acceptable, outcomes. In many cases market evaluation is misleading from a social or environmental point of view - it may be a necessary form of evaluating economic activities, but it is not sufficient. Alternative evaluation of economic activities by the techniques of environmental and social reporting, accounting, and auditing is also needed. Only the combination of conventional, market-based and alternative evaluations will provide a fair and accurate picture of economic activities.

Concerning the gulf between the haves and the have-nots, it is more than ironic that perhaps the largest gulf of all is not between Americans and people in other countries, but rather between CEOs in America and their own workers. How are we going to narrow the former until we take steps to narrow the latter?

By now we know that government cannot take care of community problems. We know that business and the free market also cannot take care of community problems. We have now come to accept that there has to be a third sector, the social sector of (mostly nonprofit) community organizations. But we also know that all institutions, no matter what their legal status, have to be run autonomously and have to be focused on their own tasks and their own mission. We know, in other words, that it is almost irrelevant whether a university is private or is tax supported and owned by the state of California. However funded, it functions like other universities. We know that it makes little difference whether a hospital is a nonprofit institution or owned by a profit-making corporation. It has to be run the same way, that is, as a hospital. And the reality in which every modern society lives is therefore one of rapidly increasing pluralism, in which institutions of all kinds, sizes, values, missions, and structures constitute society. But we also know that this means that no one is taking care of the community.

There is one simple reason why the last 150 years have been years in which one institution after the other has become autonomous: the task-centered and autonomous institution is the only one that performs. Performance requires clear focus and narrow concentration. Multipurpose institutions do not perform. The achievements of the last 150 years in every single area are achievements of narrow focus, narrow concentration, and parochial self-centered values. All performing institutions of modern society are specialized. All of them are concerned only with their own task.

How to balance the two, the common good and the special purpose of the institution, is the question we must answer. If we cannot accomplish this integration, the new pluralism will surely destroy itself, the way the old pluralism did five hundred years ago. It will destroy itself because it will destroy community. But if at the same time institutions abandon their single purpose or even allow that purpose to weaken, the new pluralism will destroy itself through lack of performance.

In the next quarter-century, more and more kinds of work will be eligible to be done anywhere in the world by people who are skilled enough to do them. Companies of all kinds will be forced to ask, 'What is our obligation to, commitment to, interest in the community and our workers? What are we really here for?' I don't know what the answers will be. They may say that the only things that matter are survival of the company and shareholder value, or they'll have a more complex answer. But companies will have to sit down and decide what is really important and what that means in terms of moving the work or not moving the work.

The argument that Milton Friedman and others use is that business has no business dealing with social issues-let 'em stick to business. It's a nice position for a conceptual ostrich who doesn't know what's going on in the world and is enamored with economic theory. Show me an economist who will argue that social decisions have no economic consequences! No economist will argue that, so how can anyone argue that economic decisions have no social consequences? And if we train managers to ignore the social consequences, what kind of a society do we end up with? According to Aleksandr Solzhenitsyn, whom I quote in the book, we end up with one that rests on the letter of the law, and that's a pretty deadly society. I'm not saying that businesspeople should take the place of politicians to decide social issues, but they have to be managing with a sensitivity to the social impact of their decisions.

Traditionally, environmental strategies are managed separately as a cost center and viewed as a compliance issue. Unfortunately, the compliance mentality leaves companies vulnerable in two ways. First, if you're focused solely on compliance, you will only do the minimum amount required to be in compliance with the law, which leaves you open to competitors who are willing to be more creative in their efforts. Second, the normal state of affairs in most companies is cyclical. There will be times when things are going well and you are in compliance with the law. Other times, there will be upsets that reduce your level of compliance. If you shoot for compliance only, in my opinion, you are almost assuring yourself of a period of noncompliance.

In my previous book, I said that top management and employees are disconnected. That is still true-in fact, if you look at all the scandals, it's because the disconnect became even larger in the last ten years. This book says that there's a huge disconnect between all managers in multinational companies-not just senior managers-and 5 billion potential consumers. Because we don't see poor people, we don't know how they live.

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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We should stop talking about 'company and society'. We should talk about 'company in society'. The market is always situated in social contexts; society should not be subordinated to the market. There are no alternatives to globalisation without companies - the point is, though, that not all models of companies are acceptable or viable in a globalised world.

All business begins with the public permission and exists by public approval. . . . So we, like all other companies, live by public approval, and roughly speaking, the more approval you have the better you live. Of course, the fundamental way of getting [approval] is to deserve it.

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The Gross National Product includes air pollution and advertising for cigarettes, and ambulances to clear our highways of carnage. It counts special locks for our doors, and jails for the people who break them. The GNP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missiles and nuclear warheads. And if GNP includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, or the intelligence of our public debate or the integrity of our public officials. It measures everything, in short, except that which makes life worthwhile.

Many Indians growing up in the United States detect an inconsistency or incoherence about modern life...Somehow you are supposed to be moral and generous in your private life, but that doesn't apply when you go to work -- you don't have to be the same person. That kind of role fragmentation or inconsistency was really seen as profane. One must find a way that synthesizes both who you are in private and who you are in public life and work. One has to find a role that creates integrity.

Markets do not work as well for social entrepreneurs. In particular, markets do not do a good job of valuing social improvements, public goods and harms, and benefits for people who cannot afford to pay. These elements are often essential to social entrepreneurship. That is what makes it social entrepreneurship. As a result, it is much harder to determine whether a social entrepreneur is creating sufficient social value to justify the resources used in creating that value. The survival or growth of a social enterprise is not proof of its efficiency or effectiveness in improving social conditions. It is only a weak indicator, at best.

Industries are shaped, Michael Porter argued, by five forces of competition: industry rivals, potential new rivals, substitute products, suppliers, and buyers. The time has come to add a sixth force to the famous strategy-making framework: the public interest.

...As Porter showed, companies compete for profits with their customers and their suppliers, but that doesn't mean that they view those groups as adversaries. Rather, it means that companies understand that they need to share the profits in a market with their customers and suppliers, that blindly pursuing their own narrow interests would end up destroying their businesses. Only when companies see the public in similar terms will they treat its concerns with equal seriousness.

Running an organization does not license a manager to violate the norms and standards of society, but instead introduces a brand-new set of moral considerations based on stakeholder obligations. In respect of normatively legitimate stakeholders (e.g. financiers, employees, customers), the ethics of business implies more obligations rather than less.

Corporate social responsibility is not an invitation for companies to take over charitable functions better left to foundations and publicly elected bodies. In economic terms it is a constraint on business activity, which must be integrated into management decision making in order to maximize long-term profits.

Subjective judgments do not become objective simply by translating them into numbers. More importantly, when some of the options under review require ethical considerations, we can cloud the difference between right and wrong when we translate all options into a quantitative order of dollar values. If you tell me that option A contains a moral impediment and option B is pristine, that is substantially different than if you tell me that option A has a probability adjusted present value of $2 compared to $1.50 for option B. And yet we tout the virtue of net present value analysis because it does that very thing.

With regard to national security, pollution, energy policy, education, global warming, and other commons issues, it's hard to see how individual self-interest can add up to the community-wide base we need to remain a competitive nation in the twenty-first century.

Few companies or institutions have addressed the root cause of unsustainability-our addiction to consumption. Instead, the prevailing mindset creates technological fixes, such as eco-efficiency. This is a classic case of shifting the burden, or focusing on the symptoms rather than attacking the problem at the roots. The underlying condition often reasserts itself in even more confounding ways, and, as a result, our capacity to change is undermined by the illusion that we are addressing the problems, when in fact we are not.

And so we need a radically different way to visualize sustainability and to think and act about it. And it begins with a simple argument: Reducing unsustainability is not the same as creating sustainability.