Business and Society: Creating Shared Value In Conversation with N. R. Narayana Murthy, Founder, Infosys

With data indicating that in 2014 nearly 40% of the world's top 100 economies are companies and not countries, there is little doubt that corporations have begun to dominate today’s life and society. The interchange of roles between governments and corporates has also resulted in increased concerns about the fallout of this corporate entrenchment.  Simultaneously, however, there is also greater appreciation of the fact that corporations can help address the most pressing challenges of development.  In this changing context, business is seen as central to the positive transformation of society. In effect Friedman’s idea of shareholder primacy and early prescription that the one social responsibility of business was to “increase its profits so long as it stays within the rules of the game” was challenged by Ed Freeman’s stakeholder paradigm, and subsequently by Porter and Kramer’s submission, that “both business decisions and social policies must follow the principle of shared value”. These perspectives more recently informed multiple areas of work including corporate governance, base of the pyramid, inclusive business models, and social entrepreneurship based approaches.

Comparable ideas have simultaneously emerged from Eastern economies too, such as Gandhi’s idea of trusteeship.  In the world of practice too, these ideas have found acceptance.  International agencies, including the United Nations, are playing a proactive role through proposals such as the Sustainable Development Goals, which require collaborative action between businesses and governments.  In India too, corporate engagement with society has seen the shift from cheque-book philanthropy to a more strategic social engagement, supported by regulatory changes that have nudged companies to make contributions to social responsibility related investments.

After tracing the changes in the academic tenor of thought and engagement, this paper captures the thoughts of Mr N R Narayana Murthy, Founder, Infosys Ltd, a pioneer in corporate engagement with society, on the role of business in society.