I tend to shudder at catchy phrases such as “internet bubble,” “web 2.0,” or “Ajaxified,” but I was unable to come up with a better term for how I have begun to visualize the next level of corporate structure than “Corporation 2.0.” This may not be a new concept, just perhaps a bit more concise and repackaged. After chewing on the moniker for a few days, and cycling through dozens of mental and sketched-out diagrams, I’ve simplified the concept down to the rather elementary doughnut diagram that follows:
Out With the Old…
The old corporate model, more or less, revolved around profit maximization. Profits at any cost, it often seemed. More mature corporations would tend to have a fairly solid corporate governance system in place, but typically lacked any kind of corporate social responsibility initiative or a formalized Code of Ethics.
In With the New…
Times are changing and there is a building consensus that corporations and their profits should be held to a higher standard. Corporation 2.0 is at the intersection of business and social responsibility. In short, as I see things, instead of simply pushing to achieve profit maximization, Corporation 2.0 combines a strong showing from each of the following disciplines to instead generate “ethical profits”:
- Business Ethics;
- Corporate Governance; and,
- Corporate Social Responsibility.
This is most likely not a startling concept to anyone that follows the noted issues, but perhaps the visual links between the three and ethical profits is helpful to view in such a manner. What the diagram strongly conveys to me is that without one of the three key pieces, the corporation will not be able to generate ethical profits–it is only through a strong showing from each of the three that ethical profits can be realized.
For instance, imagine a company with strong and consistent corporate governance, but that lacks a formal Code of Ethics. Without the code, how do employees and stakeholders evaluate ethical dilemmas? For that matter, do they have any idea what the company believes is ethical or not? Without such formal ethical guidelines, can the company truly generate ethical profits?
On the other hand, a strong showing from all three guarantees that the company is generating ethical profits. With strong corporate governance, stakeholders and employees are ensured that the proper checks and balances are in place and functioning correctly. A solid foundation of business ethics described by a formal Code of Ethics makes clear what is acceptable or not, and provides a guide for dealing with any ethical breaches. Strong corporate social responsibility initiatives ensure that the company is taking into consideration such issues as the environment, human rights, and community involvement.
I am hopeful that we will see more and more corporations moving toward the pursuit of ethical profits and I look forward to the day that I start pondering what Corporation 3.0 will look like.
In short, the combination results in a “Whole TradeTM Guarantee,” or a guarantee of high quality fair trade products (see a recent Whole Foods press release for more info). The guarantee seems like a bit of marketing hype, but should also help push fair trade issues to a broader market. In short, the guarantee should indicate that a product meets the following criteria:
