accenture

Understanding the relationship between society and business has evolved over time as new schools of thought have emerged on the topic. The traditional view of business claims businesses exist solely to earn profits, business and ethics are in conflict with each other, and people are simple and guided by self-interest (Ted Talk, R. Edward Freeman). Society does not have a stake in this view, and benefits to society are perceived as being achieved at the expense of corporate success (Strategy and Society). Changes to the traditional responsibilities and priorities of businesses have been called for as pressure from external stakeholders has mounted upon businesses to be held accountable for social challenges (Strategy and Society). These stakeholders have come from within society and include governments, activist organizations, and members of the public who are concerned about the ethical, social and environmental consequences of business activities (Strategy and Society). A shift from the standard view of business has been proposed that reflects these growing concerns and calls for accountability (Strategy and Society, R. Edward Freeman). This new way of thinking supports that the purpose of business is not to make money, but to instead bring an idea to life with passion; business is about creating shared value for internal and external stakeholders (Strategy and Society, R. Edward Freeman). The idea of shared value, where all stakeholders reap benefits (Strategy and Society), becomes applicable to business and society when the relationship between the two entities is redefined. While the traditional view identifies a tension between business and society, this new understanding emphasizes the interdependence that exists (Strategy and Society). Businesses need a healthy society in order to succeed, since ideas cannot be put into action without productive workers, capital and human resources, and customer support (Strategy and Society). Simultaneously, society needs