According to classical free-market economic theory, the sole job of a company should be to generate profits for its shareholders. However, market forces will ensure that society benefits from this goal.
One can easily criticize this view as being too simplistic and reductionist. However, the greedy corporate executive that seeks to maximize profits at all costs is a cliche.
This is a complex argument to make, however, because the free marketplace is the engine of the age we live in of material wealth.
The idea of corporate social responsibilities is a recent trend in economic and business thinking. This, combined with the rapid technological advancements in our daily lives, makes it no surprise that young entrepreneurs are motivated by monetary gain and the desire to improve the world with the companies they create.
“Don’t Be Evil.” We believe that we will be better served as shareholders and all other aspects of our lives if we invest in companies that do good work for the world in the long term. An Owner’s Manual to Google’s Shareholders the black or white answer to an argument is usually the best, but it might not be true of reality.
1. It’s a given that morale in companies is an inevitable fact
Although you may believe that money is the only purpose of a business, it isn’t always easy to do.
The actions of each person are motivated and influenced by their values. Therefore, the actions that affect the whole business result from the shared values of all the employees.
However, values and morals should be managed. It’s easy to see that putting more importance on social activism rather than on the actual running of the company can inevitably lead to poor results.
This is why creating a positive startup culture is essential for building a successful company.
2. Failing To Manage Cultural Conflict In Companies Can Be Deadly
A company’s morality is inevitable. This means that there will be an internal clash between values.
One example is a time of high political divisions in any society (e.g., High-stakes elections would have an immediate effect on organizations that work within the community. If the company’s employees have different visions of the future, it would not be easy to find a path forward and continue internal cooperation.
To combat the harmful effects of these conflicts, companies such as Basecamp and Coinbase tried to ban political discussion from their workplaces. The two companies lost a lot more employees as a result of their anti-political activism. However, this could have been a good move if there were internal cultural conflicts in the long term.
This is why it is essential that you, as a startup manager, are as transparent as possible about the values you hold and the vision you have for the future. You can avoid conflicts of culture by excluding people with fundamentally different beliefs from your business.
Your business will have values and morals. You can do this because:
- Transparency is key to attracting like-minded people.
- Actively strive to build a productive society and, if necessary, manage internal cultural conflicts.