Context
A Good Business is one that builds advantage from its response to ethical, social and regulatory challenges. The component parts of Good Business - business ethics, social responsibility and regulatory compliance - are briefly discussed below.
Ethics in business is discussed extensively in the research literature. Whereas we find there are few definitive conclusions, there is a growing consensus around some key ethical principles: Business does have an ethical role to play in society; business ethics extends beyond legal compliance; and organisations can be ethical, as well as individuals.
Social responsibility is about business managing the direct impact of its activities (things within its sphere of control) effectively and managing indirect impacts (things within its sphere of influence) in response to shifting social expectations.
Regulatory compliance is about achieving the standards set externally by legislators and regulators. However, Good Business is also about compliance with internal standards, often informed by business ethics and social expectations, or related to more formal external standards, which a company chooses to set.
These components of Good Business are not new; they are issues that businesses have had to face for many decades. However, what has changed is that they have become more interdependent and are becoming increasingly important.
Corporations are increasingly held to account by media, NGOs and other organisation that scrutinise their operations. This scrutiny exposes ethical, social and regulatory issues such that they may become global headlines within minutes and can be punished by financial markets with hours. Globalisation means that an average corporation's customers and suppliers exist in more countries; each country presents different ethical, social and regulatory risks to the parent company whose responsibility extends further along its supply chains. Regulatory environments are increasing in complexity, whilst in many areas meeting laws and regulations is seen as a minimum, but insufficient, condition for a 'responsible' business.
These challenges present opportunities as well as risks and that the best organisations can use them to their advantage. Good Businesses are operationally very efficient, because culturally and organisationally they can make necessary decisions faster. Responsibility is increasingly embedded in the Good Business brands; customers are loyal to products and services they perceive as good. Good Business means understanding the shared value that can be created by working with the societies in which they operate, often by finding common ground with some civil society organisations where each contributes their unique knowledge to new businesses that have positive impacts.
We explain in more detail the context for, models for and approach to Good Business in the following sections:
- Our Evolutionary Model
- Our point of view about Sustainable Success in the 2010s
- Our DNA Model
- Our Approach for creating and sustaining Good Business
