For several years, the mantra in business has been that its only responsibility is to maximize shareholder value. It didn’t matter how much resources it used as long as it generated a profit. Milton Friedman was famous for this theory:
There is one and only one responsibility of business: to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.
Milton Friedman
But this frame of thinking can deplete resources if it goes to the extreme.
- If you treat people like cogs in machinery, they will take no responsibility for quality and excellence.
- If you deplete natural resources, they become scarce and more expensive.
- If you are only concerned about the sale and not service, the consumer has no incentive to come back to you.
Short-term profits can end up sacrificing the long-term well being of a company. Compassion for people and the environment gives people incentives to care about you beyond the fast sale.