Leadership and Business Wisdom - Limits of Social Responsibility.

Byline: S. Kamal Hayder Kazmi

"It is not enough for business to do well; it must also do good." But in order to "do good," a business must first "do well."

Whenever a business has disregarded the limitation of economic performance and has assumed social responsibilities that it could not support economically, it has soon gotten into trouble.

Union carbide was not socially responsible when it put its into Vienna, West Virginia, to alleviate unemployment there. It was, in fact, irresponsible. The plant was marginal to begin with. The process was obsolescent. At best the plant could barely keep its head above water. And this, inevitably, meant a plant unable to take on social responsibility, even for its own impacts. Because the plant was uneconomical to begin with, Union Carbide resisted so long all demands to clean it up.

This particular demand could not have been foreseen in the late 1940s, when concern with jobs far outweighed any for the environment. But demands of some kind can always be expected. To do something out of social responsibility that is economically irrational and untenable is therefore never responsible. It is sentimental. The result is always greater damage.

ACTION POINT: Explain why this is true: In order for a business to "do good," it must first "do well," and indeed very well.