Sunday, March 9, 2008

Corporate Philanthropy: Good or (Making Up for) Evil?

This past week, my students brought up an ethical issue that made me think twice. Is it better for for-profit corporations to sin and then repent through corporate philanthropy or to sin and not atone at all?

Perhaps it is a bit hypocritical for that local brewing company to repeatedly dump in the creek and then turn around and give millions to social causes through its foundation. But as a wise friend pointed out, the woman in charge of that foundation likely has no control over, and may not even have any knowledge of, the bad, bad things that the company does, despite the fact that she shares the same last name.

Research shows that 89% of consumers aged 18-35 would switch brands for a comparably priced product if a company showed that it was a "giving" company. Where does your loyalty lie, and do you do the research before you support a company that, on the surface, seems to be charitable?

1 comment:

Lost in America said...

I like to think of myself as a caring person and yet I rarely think of the maker or distributor of a product I want to buy. I don't think I'm alone in this behavior. In spite of our protestations to the contrary, I believe it is difficult for consumers to really evaluate all the feel-good factors involved before making a purchase, especially the mundane items we buy all the time. Once in while a factoid will cross my mental threshold and I will boycott a product or store for a while (like Circuit City when they eliminated all their "too highly paid" staff who were earning the outrageous sum of $10 an hour...that's just pathetic...you can't even support ONE person on that wage!) But then I revert to the me-first mentality, if me wants it, me buys it. I've heard some similar studies in B-school that reported consumers who believe a company is a good corporate citizen will be more loyal to that corporation's brand. Hmmm. Hard to prove. But, regarding the question of charity given by questionable sources, take the money and run! At least some of the ill-gotten gains are being put to a good use!