Finding the true value in non-financial returns
This article in the Wall Street Journal Online from some years back examines the business of social responsibility and asks what’s the financial payback for generating all this goodwill. Perhaps the most interesting point to emerge was that social responsibility was not directly rewarded financially by effort invested. Companies that did just a little were rewarded almost as much as those that went all out, leading the writers of the article to conclude: “It seems that once companies hit a certain ethical threshold, consumers will reward them by paying higher prices for their products. Any ethical acts past that point might reinforce the company’s image, but don’t make people willing to pay more.” So, beyond a certain point of noticeability, the notion of social responsibility is actually more important than the reality. As consumers we are motivated to reward positive actions – up to that point, but not far beyond. This in itself raises begs wider questions around the elasticity of goodwill. How far does it stretch economically? What credibility should we give goodwill as …