The Heroic Enterprise: Business and the Common Good (Paperback) by John M Hood

Commentators, analysts, and academics have long cherished the notion that there is a fundamental contradiction between corporate profit-seeking and ethical or social responsibility. In this powerful, long-awaited response to these critics, John Hood argues that business owners and managers have huge incentives to promote economic and social progress. Moreover, he finds, the vast majority do so. With compelling evidence, Hood demonstrates how the incentives of the private sector marketplace dwarf those of the public sector in advancing the common good.

Replying to those who assert that firms must have social responsibilities beyond economic self-interest, Hood shows that corporations seeking economic rewards have made enormous strides on behalf of workers, families, consumers, and local communities by developing new products and technologies, discovering new ways to prevent workplace accidents, attempting to reduce bottom-line costs, and furthering their own long-term interests through social and community development. With detailed examples from nearly every sector of industry, Hood describes the significant contributions that most successful corporations have made to social welfare, without sacrificing their allegiance to shareholder value. By tracking the successful record of corporate involvement across a range of benchmark areas such as revitalization of the inner city, preservation of the environment, worker safety, and family values, Hood documents how businesses have brought about a wealth of positive changes to our communities.

Hood tells how Nationsbank of Charlotte, N.C., permits full time employees to shift to part time, allowing expectant mothers who are considered valued, experienced workers to stay on the job. To boost inner city economies, Kentucky Fried Chicken in the 1980's financed up to 95% of the costs of opening up franchises in urban areas. By 1993, sales at these stores averaged $50,000 more per year than the rest of the franchise system. And The Golden Rule Insurance Company, whose chairman believed that parents should have the right to choose between public and private education, set up a charitable trust that would pay half of the cost of private-school tuition for 500 deserving children in Indianapolis.

Through these and other examples, Hood turns the critics' concept of the "socially responsible" business, essentially a threat to free enterprise, on its head. Instead, by keeping a strong link between innovation and markets and competition, business continues to make its most serious social contribution by doing what it does best: providing the foundation for our standard of living and the new services that will allow us to live more comfortably and efficiently in the future.