ABSTRACT

Conventional wisdom used to be that the goal of business is to make profits for shareholders. This chapter tracks how that focus has changed from shareholders to stakeholders, which includes employees, customers, suppliers, communities, and the environment. Corporations are now seen as being responsible not just to make a profit but to serve a social purpose. Beyond providing jobs, they are expected to treat employees and customers fairly and to improve their communities and the environment. The CSR (corporate social responsibility) movement is holding businesses to a higher standard when comes to their workers and the world. By 2015, 92 percent of the largest 250 companies in the world produced a CSR report. This chapter reviews the two main categories of business organizations: for-profit businesses that put profit over purpose and non-profit businesses that put purpose before profit. It then introduces a third option, social enterprises. These are both/and organizations that pursue profit to fulfill a purpose—making the world a better place.