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Tuesday, July 26, 2011

Groupon's Social Responsibility

In a society where collective action can pressure businesses to act socially responsible it is fully acknowledged that companies need to react to consumer demands. Today, there is greater urgency for businesses to respond tocollective action because now more than ever consumers are obtaining more information on companies through social media platforms that expose their business practices. There are currently some successful models of how businesses are changing corporate behavior through their purchasing power.

Groupon, currently rated the fastest growing company,owes its rapid success to collective action taken on behalf of consumers. In response to the demands of customers benefiting from Groupon's discounts given by local businesses, companies have changed the way they operated. Currently, businesses operating under the Groupon model are tirelessly trying to respond to consumer demands for discounted products and services. The increased brand exposure can have both a positive or negative results for business. If we think of how this model can apply to collective action through social responsibility-it could place an even greater demand on businesses to be socially and environmentally conscious.

Groupon's profound effect on the relationship between businesses and customers was even a surprise to founder Andrew Mason. Mason's idea was rooted in social responsibility when he first came up with the idea of “The Point”, a social media platform that would allow anyone to create a campaign based on their collective beliefs of a cause, product or service. Groupon was later developed and became the stronger business model. Mason does not deny that Groupon’s business model is profit driven but he still believes that it is a model that people love participating in, primarily because it raises business’ profile as well as increases the act of group buying at discounts-a win-win situation. All of this came out of a socially responsible concept and it is still changing the way we interact with business. When interviewed by the Wall Street Journal, Mason elaborated, "Most of the time, the things that really change theworld exist for something fundamentally selfish and then the world changing ends up being a side-effect of that." (The Wall Street Journal, Dec 18th, 2010). Mason is transparent about his goals of growing the business quickly ultimately to an IPO status and many startups will aspire to reach this level of success. However, what should resonate as a model for every corporation is that while responding to the demands of collective action by consumers, companies can develop platforms that improve society ultimately helping to sustain their own success.

Groupon's rapid rise to fastest growing startup via collective action exposes to the business world a concept of how to grow a group of conscious consumers. By operating collectively, people are well equipped to place demands on business and it can be for the improvement of society. The power of the collective mind using social media as a conduit for change will expose companies and hold them accountable for better or for worse. The challenge for businesses today is to recognize its power and how to be savvy enough to effectively use social media to convince consumers of its commitment to responsible practices.

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