When should companies voluntarily agree to stop doing things that are legal and profitable but ‘socially useless’; and would they ever?

Abstract

The term business model is a phrase that is loosely used but in this chapter it will be given a temporarily fixed definition. Magretta (2002) likens a business model to a story that explains what a company does to make a profit. The plot of the story is how all the characters in the story, the employees, the customers, the suppliers interact to produce a product or service that the customers are willing to pay for at a price that is profitable. Like a good short story a good business model has a ‘twist’ or an unexpected sting in the tail. Johnson, Christensen, and Kagermann (2008) illustrate this by the way that Apple's business model for the iPod involved providing cheap downloads in order to lock customers into purchasing the hardware. In other market sectors, such as white goods, the twist is the reverse, the products are sold cheaply in order to realise profit on adjunct services such as insurance and maintenance contracts.

Citation

Fisher, C. (2010), "When should companies voluntarily agree to stop doing things that are legal and profitable but ‘socially useless’; and would they ever?", Sun, W., Stewart, J. and Pollard, D. (Ed.) Reframing Corporate Social Responsibility: Lessons from the Global Financial Crisis (Critical Studies on Corporate Responsibility, Governance and Sustainability, Vol. 1), Emerald Group Publishing Limited, Leeds, pp. 181-205. https://doi.org/10.1108/S2043-9059(2010)0000001014