Question

James worked for a corporation that measured its success in terms of short-term profits. James truly believed that the company could be a better company, and make more money, if it changed its strategy to focus on being a good citizen and by giving back to the community. These beliefs likely:a. would result in reliance by the community on the generosity of the company and result in hard feelings if the company ever decreases its giving. b. would result in the bankruptcy of the company, as investors only select companies that will maximize their short term dividends. c. would result in illegal activities as companies are legally required to maximize short term profits. d. would result in a long term benefit to the company and an increase in long term profits.

Answer 1

Answer:

d. would result in a long term benefit to the company and an increase in long term profits.

Explanation:

What James realized is that the company's operating strategy is very concentrated in the short term, basically concerned with profit. However, firms must have long-term strategies for their activities to continue and expand. A company that has a relevant role for the local community tends to gain prestige and consolidate a brand. This can be beneficial to the company in the long run and maximize its profits in the future. For example, if the company has a leading role in the city, it can get partnerships with the city, can get tax breaks in exchange for investments, among others.