The advent of the welfare enterprise

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Every year, thousands of companies experience a change in governance. This change in governance may have led to a change of direction or a change in ownership. This period of change is often a pivotal moment in the life of a company, which must be accompanied. These changes and this need for adaptability contrast sharply with the history of the legal definition of the company in France, which was developed under Napoleon in 1804 in the Civil Code and which has hardly been changed. To overcome this difficulty, the Senard and Notat report, handed to Economy Minister Bruno Le Maire in March 2018, on the theme of enterprise as an object of collective interest, highlights the fact that the definition of society in the Civil Code and its social purpose give the company a substance essentially reducible to profit.
At the 11th “Leaders in Avignon” conference last July, speakers reflected on the issue of the new responsibilities of companies for business leaders and business leaders.

Business as a social organization

Once considered a mere place of production, the company has evolved into a complex organization where different social objects (individuals, groups) interact. This social dimension of the company, at the opposite end of the spectrum from the simple conception of the company as an economic unit, was highlighted by the School of Human Resources after the crisis of the 1930s, when society and the company, at the same time, no longer aspired to confidence. Indeed, economic and social progress was then integrated since the advent of modern enterprise was accompanied by the idea of worker protection. The company as a social organization should not limit itself to maximizing and making a profit on the capital contribution of shareholders and executives.

Macroeconomic changes affect the microeconomic functioning of organizations. Faced with a crisis of the welfare state characteristic of Western societies, the company as an organization that falls under a dimension of organized collective action, appears as a better lever for setting up public policies. In a context of robotics and automation of tasks but also of distrust of the central power, employees are looking for meaning: a new social and professional culture is being prepared. The concept of a business project suffers from the crumbling of tasks, and many employees struggle to value their role in network complexity. Businesses must be able to retain and attract talent by putting economic progress and social progress at the centre of their concerns.

Rethinking the social purpose of the company

Organized by the IGS Group, dedicated to training and supporting companies, at Maison Jean Vilar in Avignon, the symposium “Leaders in the Land of Avignon” brings together each year, for three days, business leaders, teachers, artists and stakeholders, to share their vision of the company between humanism and governance. This year’s topical theme dealt with the theme of the welfare enterprise.

The concept of a welfare enterprise refers to the transfer by the State of the conduct and financing of certain policies. This advent of the welfare enterprise therefore implies new responsibilities for companies. These include CSR, of course, but also the adoption in 2019 in France of the levy at the source of income tax which has given the company a role as a collection agency. Businesses are also undergoing significant management changes. Indeed, the Social Security Financing Act introduced a measure aimed at small and medium-sized enterprises: on the total or partial abolition of the social package on the sums paid for wage savings. This removal represents an opportunity for companies from the point of view of reducing expenses but also to motivate employees and enhance the employer brand. This abolition was initiated by the PACTE (Action Plan for Business Growth and Transformation) Act, which is a flagship law to think about reconfiguring the responsibilities of companies and in particular the redesign of its social purpose. As such, a conference was organized at the 11th edition of the “Leaders in the Land of Avignon” entitled “Is the famous Covenant Law going in the right direction?”. From a cross-cutting perspective, speakers such as Myriam El Khomri, former Minister of Labour, Employment, Vocational Training and Social Dialogue, Bernard Cazeneuve, former Prime Minister or Philippe Donnet, Generali’s Ceo, to name but a few, reflected on the prospects of rehabilitating the company’s responsibilities at the heart of corporate law in pursuit of broader goals than profit-making.

In a context of changes in the network economy, the large company characteristic of the 20th century is fading to make way for more scattered forms of enterprise due to digital in the 21st century. To accompany these changes, the state sets the borders of the company through its responsibilities. By integrating an economic and social dimension, the company is indeed a key player in reconciling individual development with economic performance. In the end, the concept of a welfare enterprise is only a reflection of a company integrated into its economic and societal ecosystem.

Justine ANGIBAUD

Sources:

“Change in Governance and Corporate Performance” Study, Institute of Public
Policy, September 2018
Credit Mutuel’s official website

Technology Vision 2017, Accenture

Study “Enterprise, object of collective interest”, Ministry of Ecological and Solidarity Transition, Justice, Economy and Finance, March 2018

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