During my time at the University, I’ve become aware of stereotypes surrounding various majors. College lore says that General Studies students find it difficult to spell their names correctly, while it’s believed that Environmental Studies majors live deep in the woods and smoke great quantities of pot. And a common assumption about Business students like me is that we are motivated by selfish interests like making money. But like many of the labels that get thrown around on college campuses, that one misses the point of why people choose Business as a major.
Of course, that’s not to say that money-grubbers are a rarity in the world of business. There are more than a few Ross School of Business students who are ready and willing to offer 90-hour work weeks and years of their lives to prestigious but cutthroat firms. Business programs tend to be a magnet for intelligent, aggressive people who dream about Maseratis and Hermés handbags. But many people are drawn to business for other reasons.
Personally, I wasn’t certain that I wanted to study business until, during high school, I learned a true story that most Business majors learn about here at the University. The story is about river blindness, a debilitating disease caused by a parasite commonly found near rivers and streams in Africa. When transmitted to a human host by the bite of a common black fly, this parasite multiplies and, if untreated, causes itching, skin disfigurement, lesions and eventual blindness. For million of children in many African villages, the existence of this parasite meant that growing up blind was simply an unavoidable part of growing up.
Until the 1980s, there were no good options for fighting river blindness. But that changed because Merck, a large pharmaceutical company, did something that had never been done before. After identifying a substance that had little commercial value but did have the potential to treat river blindness, Merck invested millions (at a financial loss) to develop and test a drug called Mectizan. It turned out to be very effective in treating river blindness, and in 1987, Merck’s managers pledged to provide Mectizan free of charge to anyone who needed it (a commitment that Merck continues to honor today). An estimated 16 million children have been spared from river blindness due to control efforts involving Mectizan, and Merck has set a goal of completely eradicating the disease by 2020.
Mectizan is tangible proof that a good business can do much more than generate money. At their best, enterprises aren’t soulless machines run by robots. Instead, they are groups of people working together to shape the world according to their values. Merck’s first purpose, according to its mission statement, is “preserving and improving human life.” But one thing that high-performing companies like Merck, Boeing and GE have in common is that they are built around cultural values other than money. In fact, business research gurus like Jim Collins have found that the highest performing firms don’t set profit maximization as their main goal.
A recent survey of big pharmaceutical firms showed that Merck isn’t simply an anomaly — respondents reported donating 13 percent of their income to charitable causes. Actions that aren’t strictly profit-driven take place across industry boundaries. Many shoppers at Target would be surprised to learn that five percent of the company’s income is donated in order to serve community issues. Finance textbooks and economists can claim that the primary goal of a business should be to maximize profits, but an alternative view is that profits are simply a necessary condition for a business to continue its work — which can be whatever its managers and shareholders wish it to be.
Unfortunately, business students and corporations have recently gotten a bad reputation. Events like the financial meltdown, companies like Enron and managers like Bernie Madoff have exposed the fact that the private sector can fail and is often overly driven by short-term opportunism. Left unchecked, businesses can do nasty and unethical things in the pursuit of profits, ranging from stealing from investors to dumping poison into rivers.
In debates over business and assessments of business people, it’s important to see the good in addition to the ugly. Private enterprises have occasionally given us problems, but they’ve also given us solutions: cars, Mac and Cheese, global supply chains, iPods and most other modern conveniences. In a century that is likely to see a rising population, increasing scarcity of resources and wide-scale environmental challenges, enterprises will continue to act in ways that preserve and improve the quality of life for billions of people. And behind a lot of those enterprises, there will be managers, a lot of them former business students, who see profit as a tool with impact rather than an end goal.
Brian Flaherty is an associate editorial page editor. He can be reached at firstname.lastname@example.org.