Companies and Their Moral Images
On the other hand, a company could make no donations to the public, and work solely on earning money for the company. This allows the company to keep all of its earnings and not waste it on something that will not help the company profit. The company may not have an image positive as another company, but it would have more money to improve their products and facilities.
I think that companies should do a mix of both, but leaning more towards sticking to themselves. Some donations and/or acts of good deeds will keep the image positive in the public mind. Less donations means more money for the company and for the stockholders. Those are the biggest goals of the company, so those should be at the top of their lists.
I'm not so sure that donating money to charities or other good causes doesn't help a company overall. I don't think a company (or rather the individuals in a company since companies don't make decisions; individuals do) donates money to a cause just because it's a good thing to do. If they did, they wouldn't need to tell anyone about it, right? But companies ALWAYS make sure that consumers know about the good things they are doing for polar bears, or the Everglades, or whatever cause they're supporting. And I'm pretty sure they do this because some consumers WILL be more inclined to buy a product from a company that seems to be in line with that consumer's own morals. So I don't necessarily think that "less donations means more money for the company and for the stockholders." I think executives will find a profit-maximizing balance between donating too much and donating too little, just like (according to Friedman's view) they will find a profit-maximizing balance between polluting too much and polluting too little.
ReplyDeleteAfter reading both perspectives of donations to charities from companies I think David and Courtney are both right in certain aspects. As a company your number one goal is to make the best profit you can. As far as charity donations, I believe companies have to find a good balance. It is important to figure out the proper amount to donate, so that in the long run you will be making more money from your customers than what you spent to support polar bears. Basically what I am trying to say is that donations are necessary to attract customers, and put you company in a good light. However, too much donations can lead to money loss resulting in less profit.
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