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  • January 4, 2019
  • Article
  • Harvard Business Review (website)

How Companies Can Balance Social Impact and Financial Goals

By: Marya L. Besharov, Wendy K. Smith and Michael Tushman
  • Format:Electronic
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Abstract

It’s notoriously difficult for a business to manage two separate-but-equal goals—making money and creating social value at the same time, for example, or managing an existing business at the same time that you invent a new one. Most attempts at managing these ”strategic paradoxes” fail because they’re not managed carefully and consistently. (It’s easy to write a great purpose statement or to dream up a new business model but way more difficult to follow through when it’s time to make actual tradeoffs between the goals.) Three organizational mechanisms can help: guardrails that protect the weaker of the two goals, dynamic decision-making that treats high-level goals as sacrosanct but tactical decisions as provisional, and leaders dedicated to “both/and” thinking.

Keywords

Goals and Objectives; Management; Corporate Social Responsibility and Impact; Profit; Decision Making

Citation

Besharov, Marya L., Wendy K. Smith, and Michael Tushman. "How Companies Can Balance Social Impact and Financial Goals." Harvard Business Review (website) (January 4, 2019).
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About The Author

Michael L. Tushman

Organizational Behavior
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More from the Authors
  • Corporate Explorer: How Corporations Beat Startups at the Innovation Game By: Andrew Binns, Charles A. O'Reilly III and Michael Tushman
  • Leading Disruption in a Legacy Business: A Compelling Growth Ambition Is a Critical Enabler for New Ventures By: Andy Binns, Michael Tushman and Charles O'Reilly
  • The Translucent Hand of Managed Ecosystems: Engaging Communities for Value Creation and Capture By: Elizabeth J. Altman, Frank Nagle and Michael Tushman
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