2/26/2005

Do "Good" Companies Perform Better?

In an article found in Forbes titled "Who are our best corporate citizens?", http://moneycentral.msn.com/content/invest/forbes/P101993.asp, the idea that companies who are concerned with more than just the bottom line perform better in the long run is discussed. We are talking about this issue in my government and business class currently, and according to our discussions studies show no definate advantage to companies who are socially responsible. I personally think that if a company is socially responsible they will have a good reputation and therefore people will want to buy their products and invest in the company. Making that a company a good success in the long-run. I also think companies need to balance the amount of money given for the social good and the amount of money given to shareholder. I was wondering what others thought.

4 comments:

Dr. Tufte said...

In Ann's post: -1 for a poorly formatted link, -1 for a spelling error, -2 for two grammatical errors.

I think the point of what you are learning in your other class is that the position you are taking is not supported by the data. That doesn't make doing good a bad thing though.

Keston said...

I do think that being socially responsible helps a company to gain more profit. I come from a small town, and companies that are willing to support our local events are the ones that I shop at. We have corporate companies come in and they won't donate, and therefore we are less willing to take our business to them. A company does have to be aware and not donate too much, but it doesn't hurt to donate a little and get your compnay name out in the public.

Luise said...

In the classical economic model, which we learned about in macroeconomics, businesses were largely owned by entrepreneurs or owner/managers. Competition was vital among small operations and short-run profits were the only concern among early business starters. Adam Smith believed the hard work of competing entrepreneurs had a natural tendency to help the public interest when each was trying maximizing short-run profits. Basically he believed the public interest was served by individuals pursuing their own economic self-interests. According to the classical economic model short-run profits and social responsibility are one in the same.

Tom said...

I like what Keston has said about people are more likely to shop at places that have donated to some good cause, but another point is that if you provide a service or product that is of high quality and low price people will buy no matter what you've donated. If you take a class from Professor Baker you'll learn from his video called "Greed" that giving, or providing a "free lunch" isn't always the best thing.