Mgt/498 Week 2 Paper

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Ethics in Strategic Management
MGT/498

Ethics in Strategic Management
In business there are certain things that should be done and there are things that must be done if the business wants to continue. The primary purpose of a business is to make a profit and stay profitable. At the beginning of chapter three of Concepts in Strategic Management and Business Policy Achieving Sustainability, there is a story about how General Mills took it upon itself to clean up an area that was near to its headquarters and that had become quite a dangerous place (Wheelen & Hunger, p. 70, 2010).

General Mills spent millions of dollars tearing down old drug houses and helping the community afford housing with grants, the question is why did they do it? General Mills certainly was not required to spend that money the way it was spent. There was not any government agency forcing them to help the community. It seems that General Mills helped the community because of goodwill, it may be that the philanthropic actions that General Mills takes helps the management feel good about themselves. Whatever the reasoning for beginning to support poorer communities, it could be said that any person helped by General Mills will be a General Mills customer for a long time to come. Even telling their friends and neighbors about how General Mills help them or their community, thus spreading the reputation of the company.

According to Milton Friedman, any company that spends money on the community is doing so under the persuasion or expectation of its shareholders. Friedman also concludes that by spending that money on the community rather than using it to cut costs or to develop new products that they organization may be doing more harm than good to its long-term efficiency (Wheelen & Hunger, p. 72, 2010). The arguments for these points of view make sense, by donating to the community an organization fosters goodwill with the people and can create customer loyalty. On...
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