Responsibility in Business
Writers: Kamil Wójcik, Seungyeon Shin.
This essay explores the opportunities for Proakatemia to take forward work and efforts to create the sustainability pillar which is one of three pillars of the Paragon of The New Entrepreneurship – Proakatemia’s strategy and vision created in 2022. The three pillars include Continuous learning, Sustainable Entrepreneurship and Community and Networking.
Fig 1. Represents Proakatemia’s Vision of the Paragon of The New Entrepreneurship.
Essay is divided into three sections:
- Basics of responsibility and ethics. How they relate to our team companies?
- Example companies to look up to.
- Suggestion what could we do at Proakatemia.
Corporate responsibility is intricately tied to business ethics, which links with the ethical conduct of companies and the myriad issues they confront (Harmaala & Jallinoja 2013, 14). Ethics comprises a field of study that explores the concepts of right and wrong, delving into the interplay between values and ethical principles. Thus, ethics serves as a guiding doctrine dictating how individuals, as well as corporate entities, ought to behave (Rohweder 2004, 78).
Ethics stands as a branch of philosophy focused on the concepts of right and wrong. It is the art of questioning and in contrast to the natural sciences, ethics doesn’t conform to measurable phenomena. It resembles more of a negotiation, where multiple perspectives on what’s right and wrong are typically in play. Each of us holds a unique notion of what is good, what is bad, and what should be considered. This personal value system serves as the foundation of ethics. Nevertheless, it’s crucial that we possess the ability to articulate inquiries about good and bad that are separated from subjective feelings. In other words, in ethics, we should be able to ask questions and discuss concepts of good and bad in a way that goes beyond just relying on personal feelings and emotions. It implies that ethical discussions should be focused more on objective and rational considerations, reaching a higher or more comprehensive level of understanding rather than being limited to subjective perspectives.
When it comes to organizational ethics, they can be evaluated from an individual’s perspective by scrutinizing their ethical awareness and actions, or by assessing how they put into practice the principles they deem ethically sound in their professional roles. Conversely, ethical matters pertaining to a company’s operations can also be examined, encompassing aspects such as employee treatment, product safety, and fair advertising (Harmaala & Jallinoja 2013, 14).
As posited by Harmaala and Jallinoja (2013, 15), corporate social responsibility (CSR) revolves around the relationship between a company and public authorities, as well as the delineation of roles between businesses and society in nurturing the well-being of citizens and the environment. The foundational premise is that, in addition to their financial obligations, companies bear responsibility for the welfare of people and the environment within their sphere of influence (Harmaala & Jallinoja 2013, 15). According to the European Commission (2006, 1), corporate social responsibility is described as “a concept wherein companies voluntarily incorporate social and environmental considerations into their business practices and interactions with stakeholders.” Corporate responsibility encompasses an array of voluntary initiatives through which a company enacts its corporate social responsibility based on the expectations of its stakeholders (Harmaala & Jallinoja 2013, 17). Conceptually, corporate responsibility entails the implementation of actions that go beyond the legal mandates. While adhering to the law is obligatory, it does not suffice for achieving sustainable business practices (Juutinen 2016, 28-29).
It is a must to remember that corporate responsibility considers three layered dimensions which are the following: the economic, ecological, and social impacts of business activities. Yet, drawing clear boundaries between these three dimensions can be challenging, as they are intricately interconnected components of sustainable development (Harmaala & Jallinoja 2013, 18).
”Some people believe that business has nothing to do with ethics and vice versa. Though this view looks convenient and attractive it does not carry sound logic. Business is a part and parcel of human life and business organisations do not exist and function outside the society. Therefore business cannot alienate itself from the concept and norms of good and bad, developed by human society.” (Gavai 2009)
Why does the company exist? Money is not the right answer. Of course, this may be the entrepreneur’s reason for choosing entrepreneurship, but not the reason for the existence of the company. The company’s purpose goes beyond its vision and mission, serving as the reason for its existence and remaining constant over time.
The company’s purpose is not solely about achieving optimal results; it stands above that. Consider a scenario where a company is facing significant challenges and financial losses. Without a higher purpose guiding its existence, owners might be inclined to give up and seek more profitable ventures. However, when a company has a deeper purpose, one that contributes to the greater good, it instills motivation in its people to enhance its operations, delivering genuine value to customers who are willing to support this mission. This, in turn, promotes the company’s overall well-being.
At the beginning of the second year, the SYNTRE team discussed and took seriously important things such as our common goals, mission, vision, and purpose. It was not an easy process to come up with these ideas with 15 different people working together. As it took us about 2 months to reflect, there were some unspoken feelings of frustration and lack of value in finding the purpose of the team. In the end, the question was: “So, does this bring money?
In this chapter, you can get some answers to this question by looking at some successful examples: What are the values of pursuing a deep purpose for a company beyond looking at short-term win-wins?
To begin with, it is fair to be clear about the meaning of deep purpose. Gulati, a professor at Harvard Business School, defines deep-purpose companies as such. Firstly, a company with a deep purpose describes a strong and committed long-term goal for the organization. Secondly, the goals are generating profit and value for society by solving commercial and societal problems. It is not enough to talk about it; deep-purpose companies put it into action. For example, from their operational decision-making process to their strategy, communications, and processes. It sounds beautiful and ideal, but do they exist in real life? Or do we truly believe we can make projects or companies that achieve both purpose and profit?
As students who are studying entrepreneurship here at Proakatemia, we have encountered quite some businesses that pursue a profit-first strategy over many things and short-term benefits over long-term values. Considering that we are building a team enterprise for a limited time, it is understandable that we often focus on creating short-term value and quick profit. However, it should be challenged to each one of us what is the purpose that we are here to learn and do entrepreneurship. Are we here to make a meaningful and positive impact on the world or to just create short-term benefits? Certainly, embedding purpose and using it as a compass to find priorities is not easy, but it is extremely difficult (Gulati, 2022). But that does not mean it is not possible, and the following companies are proof that it is.
Gotham Greens (Gotham Greens, 2023), a farming company, is a successful example of a purpose-driven company. The company was founded in New York City in 2009 by two founders and one greenhouse expert, and ever since its launch it has been profitable and growing. Gotham produces delicious leafy greens and herbs with an unconventional and advanced farming technique that enables their greens to be free, pesticide-free, and high quality. They built the first commercial-scale rooftop greenhouse in Brooklyn’s Greenpoint neighborhood in the U.S. where they could provide fresh foods for city residents. Soon after 2013, they opened the second rooftop greenhouse with Whole Foods Market above the Brooklyn store, which was the first nation’s commercial-scale rooftop greenhouse integrated into a supermarket. Now their greenhouses have expanded to 8 different places and their greens are sold in more than 40 states in the U.S.
What is impressive is that it has renewed and reused about 46500 square meters of space that were abandoned and out of use in the city, producing local food and re-energizing communities (Gulati 2022). It shows clearly the company is contributing to the community and the environment while creating wealth for its stakeholders including employees and investors.
Figure 2. Gotham Greens’ first greenhouse in the Greenpoint neighbourhood (Clendaniel, 2011)
Figure 3. Inside of the urban farm on the rooftop of Whole Foods Market( Ha, 2014)
Likewise, a successful example shows that they were able to deliver their purposes while making a profit. One of TIME’s 100 Most Influential Companies in 2023 and a well-known clothing brand, Patagonia’s mission is ‘We are in business to save our home planet’ (Patagonia 2023). Yvon Chouinard, the founder of Patagonia, says that if we could do the right thing while making enough to pay the bills, we could influence not only the customers and other businesses but also the system along the way.
A personal healthcare company Livongo is another example. It was founded in 2008 and it is currently a subsidiary company of Teladoc. Livongo provides a program that includes tools and customized support for people who need help with hypertension, diabetes, weight management, and mental health. The program provides unlimited strips with a blood glucose meter and personalized coaching. Strips are used together with a glucose meter to measure and read blood sugar, so the diabetes patients can manage the disease. All of these are automatically found and uploaded via the Livongo app, free of charge (It’s Your Yale, 2023). Together with Teladoc Health, Livongo shares the same mission and purpose: that everyone should have access to the best healthcare anywhere. Teladoc Health’s shared values include a passion for caring for people, a commitment to unsurpassed quality, and leading with transparency and accountability (Teladoc Health, n.d.). Founded in 2002, it now has many subsidiaries, including Better Help and Livongo, and the numbers show it’s a success story: one in four Americans have access to a Teladoc health service, and $18 million worth of financial assistance is covered for those on low incomes. (Teladoc Health, 2022).
Now that we have seen some successful examples of deep-purpose companies, it is also important to differentiate deep-purpose from the false deep-purpose. The first example is the companies that put purpose as a disguise (Gulati, 2022). Companies that sell tobacco, alcohol, and weapons show commitment to social good but cause serious harm. Another example would be the companies with purpose on the periphery. They keep two things separate: benefitting shareholders and promoting themselves as an organization to be environmentally, culturally, and socially sustainable. Lastly, the companies that put purpose as a win-win. In other words, they look for the intersection where social and economic values meet. But they often fail to deliver either profit or purpose as it happens rarely only in an ideal situation.
What could be done at Proakatemia? The ultimate goal is not to push a certain way of thinking on anyone but rather to develop awareness about responsible business, and different aspects of sustainability while having room for open space to discuss ethical matters. Currently, TAMK students have available free-choice various courses which they could take during their studies. That’s great, but learning about these issues can be daunting, a little bit disconnected and even confusing at times.
One course that Proakatemia students take is Learning Journey – this year team Flip Solutions got together with Swiss students from the InnoKick Innovation Master program based in Lausanne, Switzerland. Together, students worked onsite for a week in Tampere, Finland.
Customers for the innovation were Ramboll, Tampereen Energia and Tribe Tampere. These are mostly big companies that practice sustainability in their day-to-day activities and see it as an absolute necessity. We learned that sustainability could take different forms, for example, Tribe Tampere wants to be “The warmest startup community in the Nordics”. Promotes inclusiveness, openness, and cultural diversity.
On the Ramboll website, we can read:
“A globally leading consultancy delivering integrated and sustainable solutions, shaping today and tomorrow.
We are in business to contribute to the positive long-term development of societies by fulfilling our clients’ visions and finding solutions to their most pressing needs, challenges and concerns. Improved living conditions and protection of the natural environment is the purpose of everything we do.”
We have learned that it has always been an ethos of the company and they only engage with like-minded project customers.
These are just examples, the point is that these values are important for the serious players in the market who don’t only want to be forerunners, but they want to stay relevant in the business. The example of Summer Academy is just one initiative of how we could teach sustainability-related issues in higher education.
Once Timo Nevalainen, the coach at Proakatemia, said he connects entrepreneurship very strongly with “agency” or taking the initiative to learn how to change one’s conditions of living. Taking initiative is a fundamental skill for entrepreneurship and an entrepreneurial mindset. However, even if an individual would take the initiative and try to make changes, without others it is nearly impossible to do it alone. The important point is that we are taking initiative together.
A Theory of Planetary Social Pedagogy points out an important reminder of what it means by a sustainable future. A sustainable future is a collective result of our everyday actions and from the past. It sounds obvious, but how many of us feel or are conscious that the actions of our everyday life are directly connected to the future?
In the world we live in today where everything is changing rapidly, the future seems uncertain and worrying. Pessimism for the future has been growing and is more evident than ever, as we are facing an unprecedented climate crisis with many other problems. While there are ongoing efforts in many sectors to make changes to solve the planetary crisis, it is often difficult for the younger generation to have experience in making a positive impact on the future which leads them to focus on rather personal short-term life goals (Salonen, et al. 2023). Moreover, we perceive the world with Cartesian dualism which influenced and is embedded in Western culture (Sterling, 1990). Cartesian dualism is the position that was taken by René Descartes that the world comprises two distinct and incompatible classes of substance. It led us to view the world as oppositional binary pairs such as subject/object, mind/body, or human/nature (Salonen, et al. 2023).
Given the above, what about sustainable entrepreneurship and purpose-driven companies/projects? Do we think or believe sustainability and deep purpose can survive in business? Do we think that it is not one or the other, but that it should be both?
In conclusion, responsibility, and ethics matter in business. In fact, there is no choice but to take them into serious consideration for your business. Sustainable business is not about whether we drink cow milk or plant-based milk, but it is about having a deep purpose embedded in your business. It is about building a business and making decisions in a way that is responsible, ethical, long-term, and in line with the company’s purpose. It starts with the awareness that your daily actions have impacts on the future and taking initiatives together to make changes.
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It’s Your Yale.2023. Livongo. Read on 14.11.2023. https://your.yale.edu/work-yale/benefits/livongo
Teladoc Health. No date. Empowering all people everywhere. Read on 14.11.2023. ehttps://www.teladochealth.com/about/
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Clendaniel, M. 2011. Gotham Greens: Brooklyn’s New High-Tech Rooftop Farm. Published on 28.06.2011. Read on 15.11.2023. https://www.fastcompany.com/1763555/gotham-greens-brooklyns-new-high-tech-rooftop-farm-2
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