Redefining Retail

12Be Purposeful

As we highlighted in Chapter 2, “purpose” is an abused word these days. The growing importance of the concept applies to personal as well as professional lives—despite the traditional business modus operandi to prioritize shareholders' profit over anything else. The concept of “people before profit” was anathema to Nobel‐laureate economist Milton Friedman, who was figuratively crowned for saying, back in 1970, that corporate social responsibility is a “‘fundamentally subversive doctrine’ in a free society… . [T]here is one and only one social 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, which is to say, engages in open and free competition without deception or fraud.”¹ In other words, according to this view, there is no such thing as corporate social responsibility, as the only responsibility of a company is toward its shareholders and consists in maximizing their return on investment (a.k.a. profit). Allocating money on a social cause wouldn't be in the interest of shareholders as it would reduce their profit.

However, today it is widely accepted that any business has a responsibility to go beyond serving the interest of just the owners. (Indeed, Fortune magazine published an article on September 13, 2020, titled: “50 years later, Milton Friedman's shareholder doctrine is dead.”²) Many believe companies should strive to create value for their customers, ...