Five facts about corporate responsibility

Responsibility pays off in business

 

1. Responsibility is a way of managing risks. When companies operate responsibly, they do not have to be concerned about shady practices being exposed. In the era of social media, unethical activities are more likely than ever to emerge, and they can ruin a company’s reputation – and thus business – in the blink of an eye.

2. Responsibility is an asset. When choosing where to spend their money, an ever-growing number of consumers considers the economic, social and environmental responsibility of companies. Furthermore, in the business-to-business world, people more frequently expect corporate certification and a transparent supply chain. In the past, Finnish companies were only really required to take responsibility for their activities in Finland, whereas now they are answerable for even the most distant link in their supply chain, regardless of where it is located in the world.

3. Responsibility can also be an asset in the competition for employees. Especially in low-paid sectors, good and responsible leadership and a reputation for being a fair employer can be decisive factors when new employees accept job offers. This also applies in other sectors: the companies with the best reputation will usually attract the best employees.

4. Corporate responsibility has a positive effect on all of society. For example, society as a whole is affected by how companies pay their taxes. Large corporations in particular have significant power over the evolution of societal practices. They directly influence just how ethically produced our food is, what we see on the streets and how we react to climate change.

5. Behaving responsibly is the right thing to do. The notion that the sole purpose of corporations is to yield a profit is outdated. At a time when some multinational corporations are larger and more influential than many countries, they must act in an ethically sustainable way.

Text: Hanna Hyvärinen
Photo: Jonne Renvall

Professor Johanna Kujala, senior researcher Matias Laine and Professor Eija Vinnari from the Responsible Management Research Group (RESPMAN) at the Faculty of Management (JKK) were interviewed for this piece. The Faculty of Management offers a master’s programme focusing on responsible management, risk management and the economic, social and environmental responsibilities of companies.