Business & the Community: Partnerships & Interactions

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  • 0:01 Business and Community…
  • 0:45 Community
  • 1:14 Community Involvement
  • 2:15 Collaborative Partnerships
  • 4:08 Lesson Summary
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Lesson Transcript
Instructor: Jennifer Lombardo
Businesses and communities depend on each other for support to create a flourishing, stable, and profitable society. In this lesson, you will learn about the interdependencies between companies and communities as well as their collaborative partnerships.

Business and Community Relationship

Businesses and their communities might be at odds with one another over various issues such as employment, environmental protection, and safety. Ironically, most communities and businesses need each other to survive, so their interdependent relationships create a multitude of reasons for them to get along. In this lesson, you will learn the definition of a community and explain the interdependencies between companies and the communities in which they operate. In addition, you will learn why it is in the interest of business to respond to community problems and needs. Lastly, we will discuss how collaborative partnerships between businesses and communities can address today's pressing social problems.


In the context of this lesson, a community refers to an area that can be influenced by the company or interacted with to achieve mutual goals. Companies and communities are interdependent upon each other as their expectations and successes are intertwined. For example, a community needs for businesses to pay taxes in order to have money for education. In addition, a business wants a pool of educated students to hire as their workers.

Community Involvement

Why should a business respond to community issues? The answer is that community members can be valuable stakeholders. There are many instances of communities dying from real estate crashes or drug problems, which can make businesses suffer as well. In addition, there are others reasons for companies to care about their community, such as corporate citizenship, which is when a business shows commitment to ethical behavior by balancing stakeholders' needs and protecting the environment. An example would be Microsoft's Youth Spark program that has set out to create over 300 million jobs for young people across the world.

Another reason for community involvement is that it creates goodwill and acceptance. This can result in support for coalitions or grassroots efforts, if needed, to fight activists or regulations that could impact business. Community relations departments of most corporations cover areas such as healthcare, the environment, education, etc.

Collaborative Partnerships

Business and community also create partnerships to battle social problems. Numerous social problems, such as poverty, drugs, and unemployment, dramatically affect both society and business. One result of the collaborative partnerships is economic development, or the formation of new companies and jobs within the community. For example, in the United States, the federal Community Reinvestment Act requires banks to show their commitment to local communities through low-income lending programs, which can cause new businesses to flourish, especially in urban areas.

Many businesses have created community alliances to fight and reduce crime in the area through crime abatement programs. For example, in Chicago, workshops are held for business owners and local community members on how to increase safety in the area.

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