Study Highlights Profitable Strategies for Societal Impact

As the world grapples with complex challenges such as climate change, poverty, and human rights issues, organizations are uniquely positioned to drive positive change. A recent study titled “Social Profit Orientation: Lessons from Organizations Committed to Building a Better World,” published in the Journal of Marketing, explores how companies can simultaneously generate profit and foster societal well-being.

Conducted by esteemed academics Leonard L. Berry (Texas A&M), Tracey S. Danaher (Monash University), Timothy Keiningham (St. John's University), Lerzan Aksoy (Fordham University), and Tor W. Andreassen (Norwegian School of Economics), the research examines the benefits of adopting a social profit orientation. This approach encourages organizations to invest resources purposefully to enhance the common good.

The study, based on 62 in-depth executive interviews across 21 organizations worldwide, reveals significant benefits of embracing a social profit orientation. These organizations develop new strategies that address critical problems, driving business innovation and improving societal outcomes.

Social Profit Orientation is an organization-wide perspective where organizations embrace in their core mission the creation of sustainable, positive social and environmental impacts on individuals, communities, and society at large. Organizations with this orientation proactively invest resources such as knowledge, infrastructure, labor, reputation, money, and time to enhance the common good, especially improving the well-being of people and safeguarding the health of the planet.

Examples from the study highlight organizations like Oportun and Gundersen Health System (renamed Emplify Health). Oportun tackles financial exclusion by providing affordable credit to underserved communities, offering an alternative to payday lenders. With significant investments in technology, Oportun has issued millions of loans, enabling its customers to avoid exorbitant interest rates and fees. Despite obstacles, Oportun has provided more than $18.2 billion in credit by year-end 2023, saving its customers $2.4 billion in interest and fees.

Gundersen Health System exemplifies a holistic approach to sustainability woven into the fabric of the organization. Under the leadership of Dr. Jeff Thompson, 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 transforming landfill biogas into electricity and heat. Dr. Thompson remarks, “Our mindset was: how do we protect the environment so it is a part of how we work, how we live, and how we work with our communities.”

By adopting a social profit orientation, organizations not only drive meaningful societal impact but also experience enhanced legitimacy, stronger stakeholder relationships, improved employee engagement, and increased innovation. These benefits contribute to long-term business success and sustainability.

Best practices for building a social profit orientation include aligning employee and organizational values, ensuring organizational resources and governance structures maximize societal benefits, inspiring executive and board leadership to commit deeply to social profit goals, making informed investment decisions, measuring and evaluating social impact rigorously, and fostering external partnerships while communicating purpose through compelling storytelling.

“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. By embracing a social profit orientation, organizations can lead their sectors, drive innovation, and make significant societal impacts,” said Lerzan Aksoy, Dean at Fordham University’s Gabelli School of Business.

To attain a full copy of the research and download the associated teaching guides click here.