New Study Reveals Benefits of Social Profit Orientation for Businesses and Society

A groundbreaking study titled "Social Profit Orientation: Lessons from Organizations Committed to Building a Better World" has been published in the Journal of Marketing, offering valuable insights into how businesses can simultaneously generate profit and contribute to societal well-being. The research, conducted by a team of renowned academics from various institutions, examines the benefits of adopting a social profit orientation for both organizations and society at large.

The study, based on 62 in-depth executive interviews across 21 organizations worldwide, reveals that embracing a social profit orientation can lead to significant advantages for businesses. Organizations that adopt this approach develop innovative strategies to address critical societal problems, driving business innovation while improving social outcomes.

Social Profit Orientation is defined as an organization-wide perspective where companies incorporate the creation of sustainable, positive social and environmental impacts into their core mission. This approach involves proactively investing resources such as knowledge, infrastructure, labor, reputation, money, and time to enhance the common good, with a particular focus on improving human well-being and safeguarding the planet's health.

The research highlights several examples of organizations successfully implementing a social profit orientation. Oportun, a financial services company, tackles financial exclusion by providing affordable credit to underserved communities. By investing heavily in technology, Oportun has issued millions of loans, helping customers avoid exorbitant interest rates and fees. CEO Raul Vazquez notes that despite the challenge of serving customers with limited or no credit history, Oportun has provided more than $18.2 billion in credit by year-end 2023, saving its customers $2.4 billion in interest and fees.

Another example is Gundersen Health System (renamed Emplify Health), which has integrated sustainability into its organizational fabric. Under Dr. Jeff Thompson's leadership, Gundersen became the first U.S. health system to offset 100% of its fossil-fuel use with self-produced energy. Their initiatives include harnessing solar and wind power and converting landfill biogas into electricity and heat.

The study identifies several benefits for organizations adopting a social profit orientation, including enhanced legitimacy, stronger stakeholder relationships, improved employee engagement, and increased innovation. These advantages contribute to long-term business success and sustainability.

To help organizations build a social profit orientation, the research outlines several best practices:

• Aligning employee and organizational values to create a unified mission
• Ensuring organizational resources and governance structures maximize societal benefits
• Inspiring executive and board leadership to deeply commit to social profit goals
• Making informed investment decisions focused on initiatives with the greatest social impact
• Measuring and evaluating social impact rigorously to ensure meaningful contributions
• Fostering external partnerships and communicating purpose through compelling storytelling

Lerzan Aksoy, Dean at Fordham University's Gabelli School of Business, emphasizes the importance of this approach: "Organizations today are at a crossroads where they can choose to be mere profit-generating entities or become catalysts for global change. Our study shows that the most profitable strategy might also be the one that makes the world a better place."

The findings of this study have significant implications for businesses across various sectors. By adopting a social profit orientation, companies can position themselves as industry leaders, drive innovation, and make meaningful contributions to society while maintaining financial success. This research provides a roadmap for organizations looking to balance profitability with social responsibility in an increasingly complex global landscape.

For those interested in learning more about the study and its implications, the full research paper and associated teaching guides are available for download on the Fordham University website.