In his blog this month, ASQ CEO, Paul Borawski asks the question, "how do we make the case for quality and social responsibility"?
In business school, we learned about the importance of the "3-legged stool", an analogy about balancing the needs of customers, employees, and shareholders. A business' foundation will be weakened unless it can create stable value for all three stakeholder groups.
For the customer, value comes from high quality products that meet requirements. For employees, value comes from rewarding and engaging work that helps them forge a living. And for the shareholder, value comes from both short and long-term wealth creation. Traditionally, when a company delivered value for all three, it guaranteed itself healthy and continuous growth.
But is there a fourth stakeholder, society? And if so, what exactly does it mean to be socially responsible?
I think the answer is, and has always been, yes! How an organization impacts society, either positively or negatively, will inevitably factor into their long-term sustainability. My simple definition of social responsibility is "having a net positive effect on the local communities that a company occupies". There are many ways a company can create value within their social system:
- Improving the quality of life for citizens
- Fair and equitable consumption of natural resources
- Responsibly disposing of waste products
- Charitable donation to community and other social programs
- Positively affecting local economies and markets
The extent to which companies get involved in their communities can and will vary. But it's vital that organizations redefine their stakeholder groups to include society. This expanded "4-legged stool" model helps ensure that companies place greater value on social responsibility, which in turn, enables long-term quality.