Professor Endorses a New Strategy for Business Growth Rooted in Social Justice

Timothy L. Keiningham, Ph.D., Professor, Department of Marketing, The Peter J. Tobin College of Business, is rewriting the book on corporate responsibility one paper at a time.

Dr. Keiningham’s latest paper, produced with four other marketing thought leaders and titled “Social Profit Orientation: Lessons from Organizations Committed to Building a Better World,” advocates for rethinking corporate responsibility that integrates social values into an organization’s business strategy. The authors suggest companies go beyond traditional charitable giving and instead weave social causes into their business plans, enhancing the public good without compromising business growth.

The paper was the primary topic of discussion and lead story in the Fall 2024 edition of Marketing News, the journal of the American Marketing Association (AMA), the largest professional organization in the industry.   

Social Profit Orientation (SPO), as Dr. Keiningham and his coauthors define it, is the willingness of organizations to integrate the creation of “sustainable, positive, social and environmental impacts into their core mission.” In their interviews with more than 60 leaders of 21 for-profit and nonprofit organizations, the authors show how a dual focus on profitability and social impact is a powerful strategy for business sustainability and social development.

“Most businesses have traditionally cared about being good corporate citizens, even if it is only to build credibility with the marketplace,” Dr. Keiningham said. “They have always done charitable work, but it has never been a part of the business.”

“Businesses should look for this shared value,” Dr. Keiningham continued. “How can they build something using the skill sets they have that is profitable and positively contributes to either the planet’s health or the well-being of people?”

Examples of Social Profit Orientation in Business

Dr. Keiningham and his coauthors, which include his wife, Lerzan Aksoy, Ph.D., Dean of the Gabelli School of Business at Fordham University, offer several illustrations of how companies have integrated SPO into their corporate DNA, to benefit society and the company’s bottom line. Among them is the payments company Mastercard, which, in seeking to expand into Africa, recognized how few people there could afford credit. The company worked with national governments in a campaign of financial inclusion that helped grow personal and corporate wealth while expanding Mastercard’s customer base.

Likewise, the Norwegian insurer Gjensidige, in seeking to minimize its risk exposure, adopted strict climate sustainability goals while redirecting resources toward damage prevention. Understanding clients’ risks has enabled the insurer to service them better, enhancing its reputation as a forward-thinking firm.

“Gjensidige proposed a groundbreaking approach to align their risk model with climate action,” Dr. Keiningham explained. “Their goal was to create a safer society, reduce its carbon footprint, and pursue responsible investments.”

“One of the major executives there grew up on a farm,” Dr. Keiningham added. “She recognized the growing amount of plastics and micro-plastics in the environment and said the risk to the firm is going to skyrocket. She said, ‘We are not underwriting properly; we are not helping our clients protect themselves.’”

Other examples include the hospitals manager Gundersen Health System, which in 2014 became the first health-care organization to produce more energy than it consumed. Furniture manufacturer IKEA US also committed to energy independence, guided by Chief Executive Officer Javier Quiñones, who doubles as the company’s Chief Sustainability Officer. 

“In the case of Gundersen, it realized it was a major polluter and did not want that anymore. It asked basic questions such as, ‘How do we help our patients breathe better?’ or ‘How can we lower the cost to the communities we serve?’ It turned out producing its energy saved money and lowered costs.”

“IKEA, with its wood products, did not want to just kill all forest growth,” Dr. Keiningham continued. “It helps that the CEO serves a dual role and knows the strategy.”

Benefits of a Social Profit Orientation Business Model

In these cases, and others, the companies found that a commitment to social awareness did not compromise the bottom line. They found the two motivations highly compatible, particularly among younger consumers and employees, Dr. Keiningham said.

He said employees whose values align with the company’s social mission are less likely to leave the company, reducing hiring and training costs.

“The strategy of a business should be to exist forever,” Dr. Keiningham said. “And the job is to consistently meet your stakeholders’ demands, particularly your consumers. Remember that this college-age generation is the most idealistic in history when discussing growing your market. They want jobs with meaning, and they want to support companies that make a difference. It is not in any organization’s long-term interest to say full-steam-ahead without regard for, say, the climate.”

Marketing News is among the leading voices in the industry with about 2.5 million unique visitors to its website annually. The print magazine publishes four times a year. Nearly 100,000 subscribers receive Marketing News’ newsletter daily, and more than 500,000 people engage on its social media platforms. Dr. Keiningham’s paper is already one of AMA’s most accessed online articles over the past six months.

Matt Weingarden, Executive Vice President of Communities and Journals, said the AMA was inspired by the research done bv Dr. Keiningham and his colleagues and called SPO “a ripe subject” for study. “There are increasingly complex problems facing society, and it is in the best interest of business to contribute to solving those challenges,” he said.

Dr. Keiningham hopes that the attention generated by Marketing News will shine a light on a business philosophy that he believes is consistent with St. John’s Vincentian mission.

“This model is easy for us at St. John’s to understand,” Dr. Keiningham said. “It is what we do. For businesses, it can require unconventional thinking, but it can work for them.”