New Study Highlights Profitability and Positive Societal Impact Through Social Profit Orientation
TL;DR
Embracing a social profit orientation can lead to enhanced legitimacy, stronger relationships, and increased innovation, giving organizations a competitive advantage.
Social Profit Orientation is an organization-wide perspective focused on creating sustainable, positive social and environmental impacts through purposeful resource investment.
By adopting a social profit orientation, organizations can drive meaningful societal impact, enhance legitimacy, and improve stakeholder relationships, making the world a better place.
The study 'Social Profit Orientation' explores how companies can generate profit while fostering societal well-being, inspiring global change and business innovation.
Found this article helpful?
Share it with your network and spread the knowledge!
As the world confronts challenges like climate change and poverty, a new study titled “Social Profit Orientation: Lessons from Organizations Committed to Building a Better World” demonstrates that companies can achieve profitability while driving positive societal change. Published in the Journal of Marketing, the study underscores the potential of Social Profit Orientation (SPO) to enhance both business success and societal welfare.
Conducted by a team of academics from institutions including Texas A&M, Monash University, St. John's University, Fordham University, and the Norwegian School of Economics, the research involved 62 executive interviews across 21 organizations worldwide. The findings reveal significant benefits for companies that integrate SPO into their core mission, driving innovation and improving societal outcomes.
Social Profit Orientation is a strategic framework where organizations invest purposefully in sustainable, positive social and environmental impacts. This approach involves deploying resources such as knowledge, infrastructure, labor, reputation, money, and time to address systemic challenges, rather than merely generating financial profits.
Examples from the study include Oportun, which addresses financial exclusion by providing affordable credit to underserved communities, and Gundersen Health System (renamed Emplify Health), which offsets 100% of its fossil-fuel use through self-produced energy. These organizations exemplify how SPO can lead to substantial societal and environmental benefits.
Embracing SPO not only drives societal impact but also enhances organizational legitimacy, strengthens stakeholder relationships, improves employee engagement, and fosters innovation. These benefits contribute to long-term business sustainability and success.
Best practices for implementing SPO include aligning employee and organizational values, maximizing societal benefits through resource allocation and governance, inspiring executive and board leadership, making informed investment decisions, rigorously measuring social impact, and fostering external partnerships.
Lerzan Aksoy, Dean at Fordham University’s Gabelli School of Business, states, “Organizations today are at a crossroads where they can choose to be mere profit-generating entities or become catalysts for global change. By embracing a social profit orientation, organizations can lead their sectors, drive innovation, and make significant societal impacts.”
For more information on the study and to access teaching guides, visit Fordham University’s Gabelli School of Business website.
Curated from News Direct
