It has been the fundamental premise that business organisations exist to create wealth for their shareholders ever since Adam Smith’s Wealth of Nations laid the foundations of classical free market economic theory in the 18th century. Several countries began building their economies on the free market model under which, business organisations regard their shareholders and customers as important stakeholders. At the economy level, this model ensures that the most efficient users of shareholders’ money receive their capital investments.
The concept of corporate social responsibility in the context of businesses, in general, adds another dimension to this scenario. It postulates that business organisations should consider the society as a stakeholder in addition to their shareholders and customers. In doing so, corporations ensure their long-term survival. This is supported by the views of Peter Drucker, who argued that every organisation must be able to state that its business exists to serve public good (Practice of Management), in order to survive and thrive.
Unlike other businesses, however, a hospital’s raison d’etre is healthcare, which directly fits with notions of public good. Therefore, the dimensions of corporate social responsibility acquire a slightly different colour in the context of hospitals. More so, if the hospitals are privately owned, for-profit organisations. It is this aspect that is analysed in depth, in the cover story “Corporate Social Responsibility in Private Hospitals”, by Prof. John Zinkin.
The role of privately owned healthcare organisations is likely to increase in the future as state-owned healthcare systems are under severe strain in several regions. Asia’s two emerging economies, India and China, which have experienced stupendous economic growth as a result of reforms, too, still lag in the area of healthcare for all. The economic success achieved on the strength of countries’ human resources will be sustainable on the strength of improved healthcare systems.
Therefore, the message is loud and clear for the leaders of healthcare, whether the organisations are owned by the state or privately, either for-profit or not; they shall provide incentives for efficiency, emphasise on safety, and have measures to practice and communicate socially responsible behaviour. As an IBM study predicts, the future customers of healthcare will increasingly pay out of their pocket for healthcare, be more informed on account of proliferation of information enabled by information technology, and are likely to comparison-shop for the best healthcare providers just as they do when they buy a consumer durable.
Organisations that strive to be socially responsible will build brands that would be strong enough to sustain their performance over the long term.