Social Context of Firms

But if you want to exist as a company in the future, you have to go beyond that. You actually have to make a positive contribution. Business needs to step up to the plate. – Paul Polman, McKinsey Quarterly

When it comes to the development of a business, it is very important to focus on the long-term goals as well as the short ones. According to Paul Polman, Chief Executive of Unilever, (McKinsey article, 2014) the goals should include both the interest of the shareholders as well as the society.

Polman briefly reviews the 10-year no growth period of his company and the changes he had to initiate in order to catalyze the growth and development. First thing he had to do was to increase the time period of reporting the financial statements for the shareholders. He understood the diversity of needs and perceptions of thousands of shareholders of the company and the difference goals they had toward the company, so the CEO could not effort losing time and energy on focusing on the quarterly results and thinking only the numbers to report, he had to act rationally. So, as a result, Polman decided to focus on the long-term goals.

The three major plans for a “growth mind-set” activities were to grow sales, reduce the environmental effect and increase the social impact. (Polman, 2014). He focused on attracting the investors, whose way of thinking and goals toward the company would fit the business model of Unilever better, which meant to focus more on social responsibility. He understood well the link and the bond between the environment and the business. Polman believed that if the business is committed to the social responsibility acts, the government will join. That is why he started new programs, such as protecting the tropical forest and not to sell any product that is created after illegal deforestation. As a result, he noticed that the interest and more commitment from the government.


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