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

How Companies Can Balance Social Impact and Financial Goals

by Marya L. Besharov, Wendy K. Smith and Michael Tushman

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;

Format: Electronic Register to Read

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).

About the Author

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Michael L. Tushman
Baker Foundation Professor, Paul R. Lawrence MBA Class of 1942 Professor of Business Administration, Emeritus, Charles B. (Tex) Thornton Chair of the Advanced Management Program
Organizational Behavior

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