Profits versus social responsibility Are the goals of maximising profits and being socially and environmentally responsible mutually exclusive? The answer to this question really depends on whether managers are taking a long-term or shortterm perspective on the operations of their organisation. A short-term perspective In the short run, focusing on maximising profits might mean that managers make decisions that have the lowest financial costs regardless of their social and environmental impacts. The shortterm nature of the decisions may enable them to avoid scrutiny in relation to financial performance, but it might ultimately create scrutiny in relation to the apparent social and environmental impacts. Examples include:

• dumping wastewater into local waterways, rather than paying to recycle or purify the water, if there are no financial costs in doing so

• using materials that are cheaper to acquire but have a more harmful effect on the environment when the product is ultimately scrapped

• forgoing costly workplace health and safety training for staff.

A long-term perspective In the long run, however, if managers neglect issues to do with the social and environmental impacts of the organisation’s operations, then stakeholders will ultimately become dissatisfied with the organisation. Inevitably, they will decide not to provide resources to the organisation, and profitability may be adversely impacted in the following ways:

• customers might not buy the organisation’s goods or services

• people might not want to work for it

• investors will not want to invest in it

• banks will not want to lend to it

• governments might seek to regulate against its activities. Hence, organisations do need to demonstrate that they are socially and environmentally responsible if they want to be profitable in the longer run.