Savvy Businesses Create a "Company of Citizens" With Human Capital

By Christos Papoutsy



Christos Papoutsy
Corporate socially responsible businesses need to sustain profits and replenish the capital that they invest in their businesses and in the communities. That capital takes five different forms: capital for the community; goodwill; investment; plants and equipment; human capital.

The loyalty, commitment and productivity of employees constitute human capital, the final, most important form of business capital mentioned above. A business invests in its human capital when it provides healthy work environments and better lives for its employees and their families. In sustaining its investment in this necessary form of capital, a company acts not only out of self-interest, but also promotes social well-being and justice at the same time.

To enhance and sustain human capital, the most savvy and visionary businesses cultivate a "company of citizens" where all employees are welcomed into the corporation as morally competent agents, seen as highly qualified for skilled work, rather than as depreciated units of labor.

The ancient Athenian approach to organizing workers as self-governing, intelligent citizens reflects an important, timely and efficient model for organizing and motivating workers in today's globalized age of knowledge. Citizen-workers expect certain rights in exchange for assuming responsibilities, and they want to be employees of organizations that support their own values of freedom and equality.

Loyal and dedicated citizenship in a socially responsible corporation requires certain duties from the employees: understanding and supporting the mission and strategy of the company and the philosophy of it

By working together with citizen-workers to create an integrated organizational approach, a modern company can create a deeper sense of dedication and partnership to assist in making tough decisions and in understanding their consequences, while softening the cynicism and resentment that inevitably develop when hard choices are directed from above.

s business plan; understanding and being supportive of the company's long-term good, not just of short-term gains for labor; consideration for the needs of investors, customers, and vendors, all of whom are critical stakeholders; a demonstration of concern for the constant improvement of quality. Companies likewise shoulder responsibilities in this model of sustaining human capital. Socially responsible corporations that sustain profits for their owners and investors will pay their employees good wages. They will also enhance their productivity through new and additional capital from investors, resulting in new products and services for the marketplace and increased investments in research and development. Companies and employees thus have a stake in each others' interests.

By working together with citizen-workers to create an integrated organizational approach, a modern company can create a deeper sense of dedication and partnership to assist in making tough decisions and in understanding their consequences, while softening the cynicism and resentment that inevitably develop when hard choices are directed from above.

Ancient Athenians demonstrated the effectiveness of collective action when citizens displayed mutual respect for each other and when they called upon the power of democratic values and governance structures. Today's workers do not usually face the same life-and-death challenges that the Athenians did. But they are nonetheless confronted with very difficult issues and circumstances in today's highly competitive, globalized economy. They must exert a great effort daily to produce more and better goods at costs lower than the competition. They must struggle to accept down-sizing and leveling pay reductions. And they must sacrifice precious time with family and friends in an attempt to overtake or pull ahead of competitors. It is a tough time to make a decent living in a global economy that constantly challenges citizen-employees and their companies.

The same ideals that prompted the Athenians to build a highly efficient "company of citizens" are equally valid today. When workers experience freedom, equality, and security, when they know that they are truly partners in their organizations, when they truly believe passionately in the virtue of belonging to their organization, and
when they actually participate in the decision-making through clearly understood institutional provisions, their organization will be capable of achieving truly remarkable performance. And it is this outstanding performance—a noble and worthy goal for all--that helps to sustain the system of corporate social responsibility, a precept followed by top-ranking, savvy corporations.

For more information about Mr. Papoutsy, or to read other articles on corporate social responsibility or on the topics of the Horatio Alger Lecture Series, log onto the Business Arena section of the Hellenic Communication Service website at http://www.HellenicComServe.com, or visit the webpages of the Christos and Mary Papoutsy Distinguished Chair in Business Ethics at Southern New Hampshire University at http://www.snhu.edu. Mr. Papoutsy welcomes comments and may be reached via email at papcoholding@papcoholdings.org