Is it really better to give than recieve?
According to a study done by two Missouri-Columbia researchers, companies that have good reputations and give to charitable organizations see a positive return on business. On the other hand companies with bad reputations who give to charities see a negative return on business. I found this to be quite interesting. Attempts by companies to recover from a bad reputation, such as donating money, lose business. Corporate public relations managers who plan to give money to 'save face' after severe reputation damage should reconsider their giving because the public is diligent about interpreting the real motivation for why a company gives money to social causes states Jiyang Bae, one of the researchers. So what are your thoughts, do you think the American public is truly getting the picture when it comes to sympathy donations?
2 comments:
I guess this relates to marginal analysis. The companies with good reputations have a lower cost in associating with charities. It givs them positive returns. The marginal benefit still outweighs marginal cost, and the good reputation companies can afford to do one more unity of charity for the increase benefit. It is just the opposite for the companies with bad reputations. They should do less charity because it is not worth the return. They need to go back to the drawing board with public relations.
I think this is a very interesting topic. I am currently doing an internship with Merrill Lynch in NYC and I have many friends working in different companies, such as Credit Suisse, Goldman Sachs and Lehman Brothers. Interesting enough, all of us are required to attend a day-long community service during our ten-week internship. For Credit Suisse, interns go to a poor community school, and play with the kids there for the entire day. They play basketball with the kids and try to teach them how to do mathematics. For Goldman Sachs, interns go to the beach and pick up the trash for the community. For Merrill Lynch, I heard that we are going to do some house maintenance, such as painting. I believe those companies are trying to tell us the importance of building up a good reputation. In the business world, reputation is the last thing people would like to give up. I think the benefits they receive from a good reputation is much more than what they give to the community.
~Tian
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