In the post-GFC era there is growing public debate on what role for-profit companies should play in society.  While traditionally the primary role of business has been seen to maximise shareholder value, there is growing sentiment that businesses must have a broader responsibility that focuses on maximising the well-being of community stakeholders.  Firms that fail to embrace this change risk losing the support of governments, customers and employees. 

 In response to this shift in expectations, many firms have focused on implementing corporate social responsibility (CSR) practices.  However, while these practices may enhance community well-being, they are often criticised for failing to enhance firm financial wellbeing.  As such, there have been calls for organisations to shift from a CSR approach that is detached from the core activities of the firm to the embedding of social responsibility into core business activities.  The consideration of social issues when developing business processes holds the promise of both enhancing a firm’s social impact while simultaneously helping the firm identify and take advantage of business opportunities that are created by social issues in society. 

Social procurement, the use of social organisations when selecting vendors, represents one example of this new embedded approach to corporate social impact. The selection of not-for-profit and/or social enterprises as vendors provides funding needed by these organisations to achieve their social mission. Thus, corporations are able to directly impact the resources allocated towards specific social issues. Partnering with these organisations can also enhance the brand of the firm with governments, customers and employees.  In addition, using social organisations as vendor’s promises to provide firms with new insights into social issues and the segments of society impacted by them. This information can be used to enhance product development, marketing efforts and employee recruitment.

Ian Williamson 

Dr. Ian O. Williamson

Associate Dean, International Relations

Helen Macpherson Smith Chair in Leadership for Social Impact

Director of the Asia Pacific Social Impact Leadership Centre