Can Business Solve Social Issues Better than Nonprofits?


Creating and building solutions for the biggest issues we face in today’s world, ranging from environmental problems to social issues, is not the sole territory of nonprofits, NGOs, and governments, as the current trend of social entrepreneurs is demonstrating. But what about the role of other businesses, those that aren’t strictly focused on social or environmental good as their mission? Do they have a part to play in overcoming the challenges that humanity faces?

If you take the conventional view, most businesses are the ones creating the problems, not solving them, and the ways that they give back, through philanthropy or sustainability initiatives, are just a token gesture when compared to the full scope of what’s needed to truly make a lasting difference in environmental and social issues.

However, according to Michael Porter, a professor at Harvard Business School, business can provide what no other entity can when it comes to solving social problems, which is the ability to scale up solutions to the level needed to have a big impact.

“Why do we turn to nonprofits, NGOs and governments to solve society’s biggest problems? Michael Porter admits he’s biased, as a business school professor, but he wants you to hear his case for letting business try to solve massive problems like climate change and access to water. Why? Because when business solves a problem, it makes a profit — which lets that solution grow.”

In a piece on the Harvard Business Review, Porter makes the case that most businesses remain stuck in the mindset of social responsibility, where social issues are considered to be “at the periphery, not the core”, and that in order to move forward, that mindset must be reconsidered in terms of creating shared value:

“The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society. Perhaps most important of all, learning how to create shared value is our best chance to legitimize business again.”

In contrast with Porter’s view on business as a vehicle for solving social issues, Michael Sandel, who teaches political philosophy at Harvard, argues that market and commerce aren’t the best solutions for societal problems, and points out the dangers of living in a society where everything is up for sale:

“The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society? What role should markets play in public life and personal relations? How can we decide which goods should be bought and sold, and which should be governed by nonmarket values? Where should money’s writ not run?” – Sandel

To try to reconcile these two seemingly disparate points of view, TEDGlobal host Chris Anderson brought Michael Sandel and Michael Porter on the stage after their individual talks to debate the issue:

What do you think? Are we in danger because of our “marketization” of everything, or is there a place for business as a force for solving social issues? Or is there a healthy middle ground?


« »

About the Author

lives in southwestern New Mexico and digs bicycles, simple living, organic gardening, sustainable lifestyle design, slacklining, bouldering, and permaculture. He loves good food, with fresh roasted chiles at the top of his list of favorites. Catch up with Derek on Twitter, RebelMouse, Google+, or at his natural parenting site, Natural Papa!