Katherine Skarsgard’s blog post suggests that a socially responsible approach to running a company is necessary for success. FEED, the company that she mentioned in her post, is able to add a value proposition and reach another customer segment by donating a portion if its profits to charity, allowing it to become successful. However, not all companies need to be ethical to be successful. In fact, many companies are able to become more profitable by being unethical. Coca-Cola, for example, is able to reduce its costs by draining public groundwater in India. While Coke’s actions are immoral and have led to protests, from a business perspect
ive, being unethical is a good move. Most people either do not know or do not care that, by drinking a Coke, they are contributing to problems in India. It does not need to make a plan to specifically reach customers who care about ethics; it already has very powerful value propositions that allow it to reach almost everyone – brand recognition, taste and cost, among others. Through its exploitations of water resources in India, the total cost of producing its product is decreased, and therefore its profit is increased.
Image: http://killercoke.org/crimes_india.php
Sources: