Some people eat to live and some people live to eat.
And it is the same with companies. Some companies carry out their business in order to profit from it, and some companies generate profits in order to sustain their business.
Maybe for private companies, but public companies sole purpose is to generate profit. If they are not doing it to the best of their ability shareholders will replace the executive team.
>Usually maximizing shareholder value is not a legal obligation, but the product of the pressure that activist shareholders, stock-based compensation schemes and financial markets impose on corporate directors.
Your link agrees with me. If shareholders believe decisions are being made which lead to less profits leadership will be removed.
Why then does Ben and Jerry's get involved in advocating for any number of political positions? (https://www.benjerry.com/values) They're a division of Unilever, a public company... an international conglomerate no less...
Certainly it can't be profit motive. Some of their positions would reduce profitability and alienating a substantial number of your potential customers can't be helpful for business either.
Maybe Unilever management or it's board are asleep at the wheel. Who knows, but there are plenty of counter-examples that demonstrate that no company is necessarily about financial profits alone. I'm pretty sure that investors know this, and invest for some of these non-financial motives as well... again, may not be the norm, but probably not rare for these companies either.
Ben and Jerrys is a luxury product. Being politically conscious is part of their brand and a reason they are able to charge high margins. They believe that differentiating themselves leads to long term profits. Critically, it's not just short term profits that are being maximizing. Creating a strong brand is the only way to ensure your product won't be undercut which is why firms are willing to engage in activities which build goodwill among their customers even if there are no immediately obvious profit motives. Political donations are part of Ben and Jerrys marketing budget.
The fact that every decision public companies make is done to maximize profits. If Ben and Jerrys didn't cultivate this image they'd just be another company selling overpriced ice cream. Instead I think it's fair to say they're an institution. That's not to say the people running B+J don't believe in the cause they're donating to, I'm sure they do, they just also believe it's good for business.
And it is the same with companies. Some companies carry out their business in order to profit from it, and some companies generate profits in order to sustain their business.
reply