Reset: Business and Society in the New Social Landscape

264 Pages·2018·1.13 MB·english

by  James Rubin

R E S E T
Business and Society
in the New
Social Landscape
JAMES RUBIN and
BARIE CARMICHAEL
RESET

Columbia University Press
Publishers Since 1893
New York Chichester, West Sussex
cup.columbia.edu
Copyright © 2018 Columbia University Press
All rights reserved
Library of Congress Cataloging-in-Publication Data
Names: Rubin, James R., 1968- author. | Carmichael, Barie, author.
Title: Reset : business and society in the new social landscape /
James Rubin and Barie Carmichael.
Description: New York : Columbia University Press, [2017] |
Includes index.
Identifiers: LCCN 2017031578 (print) | LCCN 2017051062 (ebook) |
ISBN 9780231545907 | ISBN 9780231178242 (alk. paper)
Subjects: LCSH: Organizational change. | Industries—Social aspects.
Classification: LCC HD58.8 (ebook) | LCC HD58.8 .R825 2017
(print) | DDC 658.4/062—dc23
LC record available at https://lccn.loc.gov/2017031578
Columbia University Press books are printed on permanent
and durable acid-free paper.
Printed in the United States of America
Cover design: Noah Arlow
CONTENTS
Foreword vii
Editor’s Note xvii
INTRODUCTION 1
1. THE BUSINESS TRUST–EXPECTATIONS GAP 13
2. CLOSING THE GAP IN THE NEW SOCIAL
LANDSCAPE 35
3. INHERENT NEGATIVES: MANAGING RISK
AND REPUTATION 69
4. CORPORATE CHARACTER 107
5. THE NEW CORPORATE BRANDING 131
6. REPUTATION LOST AND FOUND 161
7. RESETTING THE SWEET SPOT 193
Notes 213
Index 235

FOREWORD
ROGER BOLTON
I
n Reset, James Rubin and Barie Carmichael crystallize the
significance of megatrends converging into a profoundly
new social ecosystem that is changing the public’s view of
the role of business in society. The informal social compact
between business and society that was accepted in the twen-
tieth century is no longer sufficient. The authors offer a pen-
etrating analysis of the challenges corporations face today,
tracing the converging trends in pop culture, workforce
demographics, media, business reporting, and large-scale
issues that have dramatically transformed the social land-
scape in which business governance, strategy, and commu-
nication now operate. The result is a dichotomy of declining
trust in and rising expectations of business. Empowered by
today’s transformative level of instantaneous communica-
tion, an activist public exercises unprecedented pressure to
hold corporations accountable for their behavior. Rubin
and Carmichael document the global phenomenon of the
public’s growing expectation that business must not only
FOREWORD
mitigate its negative social impact, but also address press-
ing societal needs, made more urgent in an era when gov-
ernments and political leaders have become unwilling or less
able to serve the public good.
Since the beginning of the industrial revolution, public
opinion has significantly shaped the sociopolitical environ-
ment in which ever-larger and more important corpora-
tions seek to operate. Arthur W. Page, considered to be the
first senior corporate public relations executive, observed
in a 1939 speech on industrial statesmanship, “All busi-
ness begins with public permission and exists by public
approval.” He explained, “The public permission takes the
form of charters, licenses and legal authorizations of one
kind or another. Public approval is generally represented by
reasonable profits, reasonable freedom of action and a few
kind words. A lack of public approval is expressed in a good
many ways—laws, regulations, commission rulings, investi-
gations, public hostility and most vital of all, by a lack of
patronage.”1
During the twentieth century, Page’s observation played
out in several waves of government regulation in response
to public concerns about and distrust of business, with anti-
trust regulation early in the century; a significant increase
in government involvement in the economy through the
New Deal following the Great Depression; and the environ-
mental, health, and occupational safety laws in the sixties
and seventies. As the century came to an end and a new one
dawned, corporate scandals led to the Sarbanes-Oxley rules
in 2002, and the global market crash led to the Dodd-Frank
financial regulation in 2008.
viii
(cid:81) (cid:81)
FOREWORD
Throughout the century, a debate about the responsibil-
ity of business to society raged, with some (notably Milton
Friedman) arguing that business’s only responsibility is to
deliver a profit to its shareholders and others maintaining
that business has a responsibility to create value for a broader
set of stakeholders—including society at large. Throughout
this period, as government regulation increased and the
responsibility of business was debated, an informal social
contract emerged between business and the public. Busi-
ness was expected to produce quality products and services
at reasonable prices, to provide steady employment in a
healthy and safe environment, and to support community
institutions.2
This insightful volume of analysis and recommendations
arrives at a critical moment: Corporations the world over are
struggling to understand and cope with the demise of the
twentieth-century social compact; the risks associated with
stakeholder activism; and the simultaneous rising demands
and opportunities for business to create real economic and
social value that goes beyond its traditional stakeholder
group of shareowners, customers, and employees. The corpo-
rate social responsibility movement, which initially saw busi-
nesses seeking to conduct their affairs in socially responsible
ways, is evolving into an era of conscious capitalism3 or shared
value,4 in which businesses are expected to create not just cus-
tomer and shareholder value, but societal value, as well.
After thoroughly and persuasively documenting the new
social landscape for business, Rubin and Carmichael make
a bold observation: success in this challenging environment
requires businesses to reset the sweet spot. Historically,
ix
(cid:81) (cid:81)