Why Ford, Chanel And Other Companies Pitch In During A Crisis – Without The Government Ordering Them To

Severe shortages of critical medical supplies have prompted governments to compel private companies to fill the gap. In the U.S., President Donald Trump invoked rarely used powers to force General Motors to make ventilators, while the leaders of France, the U.K. and Japan have put pressure on companies to make more medical supplies.

But, judging by how many non-medical companies have voluntarily stepped up to shift their manufacturing might to produce health care supplies – including GM rival Ford – it seems hardly necessary.

Fashion brands such as LVMH, Chanel and L’Oreal are transforming their factories to mass produce face masks. Spirit and beer makers Anheuser-Busch, Diageo, Molson Coors and Bacardi are shifting some of their production and distribution towards hand sanitizer. And automakers Toyota, Volkswagen and Fiat Chrysler are leveraging their 3D printing capabilities to produce face shields and are partnering with other companies to make ventilators.

And that’s just three industries. In all, hundreds of companies across the globe have committed money, supplies and know-how to help with the COVID-19 response, according to the U.S. Chamber of Commerce Foundation’s corporate aid tracker.

Why are these companies being so generous?

As scholars of corporate social responsibility, we believe altruism certainly plays a role for many of them, but it’s not the only motivator. Research on company behavior points to two others: bolstering reputation and avoiding regulation.

Burnishing the brand

In normal times, companies often undertake socially responsible initiatives to enhance their brand and build a stronger relationship with consumers, investors and employees in order to drive profits.

What’s a socially responsible initiative? There are many definitions, but the way scholars like us think of it is it means taking voluntary action that is not prescribed by law or not necessary to comply with a regulation.

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